Tech Mahindra to IPO
Indian telecom software and services firm Tech Mahindra Ltd. has announced it will list on two Indian stock exchanges next week, raising up to $100 million to fund its expansion.
The company is to issue nearly 12.75 million shares, about 11 percent of its capital, at a price range of between 315 Rupees (US$6.75) to Rs365 ($7.82), raising between Rs4.015 billion ($86 million) and Rs4.652 billion ($100 million).
Its stock will be listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE).
Tech Mahindra, formerly known as Mahindra-BT or MBT, is one of dozens of Indian companies providing R&D, consulting, outsourcing, integration, and other services, to vendors and carriers all over the world. (See MBT Becomes Tech Mahindra.)
Light Reading has just launched a "Who Does What: Outsourcing to India" report that categorizes these companies -– and seeks information on those we don't know about -- ahead of an industry survey that will uncover which of them are highly rated by their telecom customers.
Tech Mahindra is highly rated by its major customer, BT Group plc (NYSE: BT; London: BTA), which generates about 70 percent of its sales. Tech Mahindra says its revenues in the year ended March 31 were Rs12.43 billion ($266 million), while pre-tax profits were Rs2.35 billion ($50.4 million), claiming to be one of India's Top 10 software exporters.
That rating comes as no surprise, though, as the British carrier is an investor, holding a pre-IPO stake of 43 percent; BT will sell some of those shares as part of the IPO.
"Tech Mahindra has played an important role in BT's strategy and continues to be a valued partner... The decision to enter the capital markets is a firm reinforcement of its business strategy," stated Andy Green, CEO of BT Global Services, in the official announcement of Tech Mahindra's IPO plans.
The Indian company is also rated highly by partners including Motorola Inc. (NYSE: MOT), which this week announced a joint venture with Tech Mahindra to develop applications for carriers and enterprises. (See Moto Makes New Friends, Celona, Mahindra Team Up, MBT, VeriSign Team Up, Visual, MBT Expand R&D, BEA Names New Partners, and Clarity, MBT Form OSS Alliance.)
Tech Mahindra offers a range of products and services to carriers and vendors, including OSS integration and support systems and services, digital rights management (DRM) software, outsourced testing services and facilities, applications development, and other support and consultancy services.
Late last year it acquired Texas-based telecom technology research firm Axes Technologies for $54 million, giving Tech Mahindra a presence in the U.S. market. (See OSS Firms Shake Up Market and Mahindra-BT Picks Up Axes.)
The money raised from the IPO will mostly be used to build a new facility at Rajiv Gandhi Infotech Park in Hinjewadi, Pune, to house about 9,000 staff.
— Ray Le Maistre, International News Editor, Light Reading