KPO firm eClerex to tap market for Rs 101cr

MUMBAI: KPO firm eClerex Services is planning to raise Rs 101 crore from the capital market. The firm has filed its draft red herring prospectus with Sebi for an initial public offering (IPO) consisting of a fresh issue of shares and an offer for sale from the promoters and one of its investors Burwood Ventures. The IPO will be through the book-building route. Set up in 2000, eCelerex provides data analytics and data process management services to the retail, manufacturing and financial services industries. Recently, it acquired Ingentica Travel Solutions and its subsidiaries, marking an entry into the travel and hospitality sector. The company proposes to use around Rs 22 crore of IPO proceeds to make more acquisitions. The rest will be used to set up infrastructure and additional facilities. The company has already taken up a facility at Hinjewadi in Pune for its expansion beyond Mumbai. It’s existing facilities are located in Mumbai. The company employs over 1,000 professionals. For the year ended March 2007, the company posted a net profit of Rs 40.5 crore on revenues of Rs 86 crore, giving a profit margin of close to 50%. The company’s net profit for the quarter ended June 2007 was Rs 10.2 crore on revenues of Rs 26 crore, giving it a profit margin of around 40%. The high margins have been attributed to the complex work it does for clients and its domain expertise, according to one of the directors and co-founders of the company P D Mundhra. The downside to the company’s high profitability is that a large percentage of its revenues, around 85%, come from five customers. Under the existing shareholding structure of the company, the promoters own about 73% and Lehman Brothers and Dell Computers own about 3% each. The rest is held by Burwood Ventures, an investment firm based in Virgin Islands. JM Financial and Edelweiss Capital are the book-running lead managers to the issue