Sasken IPO opens with a bang

Bangalore: The Initial Public Offer of Sasken Communication Technologies Limited (Sasken) received an overwhelming response on day one itself with the issue overscribed by eight times within few hours of opening today.

The company entered the capital market today with an issue of five million equity shares of Rs 10 each for cash to be decided through a book-building price with the price band fixed between Rs 230 and Rs 260 per share. According to senior officials of the company, the initial response was overwhelming.

A pioneer in telecom R and D outsourcing and the first Indian company to have more than seven patents filed in the US and 27 more in the pipeline, Sasken had major investors in multinationals Intel, Nortel networks and Nokia.

The company had reserved 60 per cent of the 4.5 million shares available for public to qualified institutional buyers on a discretionary basis and another ten for non-institutional investors.

The company had reserved 60 per cent of the 4.5 million shares available for public to qualified institutional buyers on a discretionary basis and another ten for non-institutional investors.

The balance 30 per cent is reserved for the retail investors.

The net offer to public constituted 16.36 per cent of the fully diluted post issue paid up equity capital.

Switching over to royalty cum licence mode payment of its products instead of licencing fee as earlier, Sasken has a hybrid business model, which involved a mix of software products and services, which were complementary to each other.

Out of the total revenue its services and products business contributed 74.51 per cent and 25.49 respectively in 2003-04 and 85.97 per cent and 14.03 per cent of consolidated revenue for the last fiscal.

Speaking to newsmen here, company Chairman and CEO Rajiv Mody said the company aimed to utilise the capital raised to set up a campus for software development in Bangalore at a cost of Rs 126.08 crore and to meet general corporate expenditure including strategic investments, acquisitions and joint ventures.

The company's revenue grew by 45.53 per cent to touch Rs 241.77 crore last fiscal as against Rs 166.13 per cent during 2004 fiscal.

Its clients included top 16 tier one companies across the world with top ten customers contributing to 82.26 per cent of the revenue.

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