Confident of holding 23-24% margins: Persistent Systems

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The initial public offering (IPO) of Persistent Systems opened for subscription on Wednesday. The 54,19,706 equity shares' IPO, which closes on March 19, consists of a fresh issue of 41,39,000 equity shares and an offer for sale of 12,80,706 equity shares by Dr Shridhar Bhalchandra Shukla and Vijayalaxmi Shridhar Shukla and Ashutosh Vinayak Joshi. The company will raise around Rs 157.17-168 crore at price band of Rs 290-310 per equity share. Promoters' holding will be reduced to 38.83% from 43.31% post issue.

On the sidelines of the listing, its Chairman and Managing Director Anand Deshpande said 37 of the 200 customers were companies with revenues of USD 1 billion.

Confident of holding 23-24% margins, he said the existing business would be susceptible to taxes and would be paying more in FY12.

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

Q: The unique thing about your company is that it is positioned a slightly differently from the regular software services provider with your focus on outsourced product development. Can you briefly explain what you do differently and how your profile is different from the vanilla service provider?

A: We are focused on outsourced-product development. Persistent was started in 1990 and we built software products for product companies. So if you were to look at it in terms of an automobile analogy, there are people who make cars, so we have the factory for building cars. We would be the factory for building software products and we do this for more than 200 customers. We have shipped more than 3,000 products releases in the last five years and we work with these product companies and build their products for them from India. We have about 4,500 employees and over 200 customers.