Four Soft plans IPO to fund expansion

Circuit EC / Mumbai

Four Soft, a Hyderabad-based consulting and software product company, recently filed a draft prospectus with Securities and Exchange Board of India for its initial public offering (IPO) in December. The company plans to invest the Rs 20 crore it aims to raise through this initiative to expand its operations in the US, set up new offices abroad, develop infrastructure, and also acquire smaller companies.

The company will make a public issue of around eight million equity shares with a face value of Rs 5 each for cash at a premium of Rs 20 per share, aggregating Rs 19.8 crore. Said Palem Srikanth, managing director of Four Soft, “We expect our paid up equity share capital to increase from Rs 11.89 crore to Rs 15.86 crore.” UTI Securities, which has picked up Rs 7 crore worth of equity in the company, is the lead manager, while Karvy Consultants, another promoter with an investment of Rs 1 crore, is the registrar.

The company, which posted a profit of around Rs 3 crore in the last fiscal, expects to more than double its revenues to Rs 15 crore in the current fiscal. The company also plans to use part of the proceeds from the IPO to fund its inorganic growth initiatives by expansion of its existing facilities and to meet its product development and R&D expenses.