FCS Software to raise $40m; board approves 10:1 stock split

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See latest News about FCS Software See previous management interviews See what other Experts & Brokerages are saying about FCS Software FCS Software BSE | NSE 09/02/12 Are Mutual Funds betting on FCS Software?

FCS Software , provider of IT services in India and US. plans to raise USD 40 million via an FCCB, ADR, GDR or QIP issue and the board has approved a 10:1 stock split.

Managing Director Dalip Kumar said that the company was planning to set up a subsidiary in the UAE and not just concentrate on the US market.

On fund raising plans he said, "We basically are looking to raise more funds via FCCBs or GDR and we are looking to invest that in terms of acquisitions or in terms of partnering technology side with companies to enhance our portfolio."

Here is a verbatim transcript of the exclusive interview with Dalip Kumar on CNBC-TV18. Also watch the accompanying video.

Q: Your first quarter earnings itself have not been very encouraging, you saw a fall both in margins as well as in the revenues. Have you seen anything positive in the performance or in the order book in the past few weeks that will expect you to improve the earnings picture going forward- do you think FY10 would see a positive sales growth?
A: Basically, we have been a very US centric company. Most of our revenues have been coming from US segment and so recently we have been working on how to correct that situation. We basically are looking to expand our client base in Middle East and Far East. So in terms of expanding our geographies that were are working in we have been servicing US clients very successfully now for the last 15-16 years.

There have been pressures from the US market recently but it depends on how the market recovers for us to really predict whether we make the revenue recovery or the net margin recovery in the US segment. We have a strong game plan in the Middle East and the Far East and that will give us a strong come back in the coming quarters.

Q: What is the kind of expectation you have on your revenues as well as your bottomline going forward - in fact your margin picture as well has slipped, so can you give us some guidelines?
A: The way the market is currently positioned is for us to expand in new areas and to see how much it will impact our revenues this year. We basically are looking to raise more funds via FCCBs or GDR and we are looking to invest that in terms of acquisitions or in terms of partnering technology side with companies to enhance our portfolio.

If we are able to go ahead and raise more funds in coming 3-6 months, those investments will start showing results probably not maybe this year but next year onwards.

Q: Are you seeing yourself diversifying away from the US markets?
A: Yes currently we are trying to target Middle East and we are looking to open offices in Middle East probably in the next one and half months. We have already opened an office in Singapore 3 to 4 months back. We have good conversations going on and we are hopeful we will do nice in that market.