Persistent Systems to tap capital market

Persistent Systems, a software product development services company, has plans to enter the capital market.

The company has filed the Draft Red Herring Prospectus (DRHP) with Securities and Exchange Board of India (SEBI) for a proposed public issue of 4,974,836 equity shares of Rs 10 each for cash at a price to be decided through a 100 per cent book building process.

The issue comprises a net issue to the public of 4,573,944 equity shares and a reservation of up to 4,00,892 equity shares for eligible employees. The issue would constitute 12.48 per cent of the fully-diluted post issue paid-up capital of the company. The net issue would constitute 11.47 per cent of the fully-diluted post issue paid-up capital of the company.

Pre-IPO placement

The company is considering a pre-IPO placement of up to 2,19,279 equity shares with certain investors. The issue will be priced through book-building and the funds are proposed to be used for expansion of its facilities at Hinjewadi in Pune and Nagpur, investments in hardware and software infrastructure and setting up of a SEZ unit in Hyderabad through its subsidiary.

The rest of the funds would be used for general corporate purposes, the Chairman and Managing Director, Dr Anand Deshpande, said.

Persistent Systems currently conducts business at Pune, Nagpur, Hyderabad, Goa and Bangalore.

With 4,000 employees, it has delivered over 2,000 product releases to its 170 customers in the last five years, reports The Hindu Business Line.