Omnitech has earmarked $5 mn for acquisitions:

Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Omnitech InfoSolutions IPO opens July 19,2007 Omnitech InfoSolutions IPO price band at Rs 90-105 Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Omnitech is a company from the IT Solutions space and is coming out with its IPO . The price band is set between Rs 90-105 per share.

 

Atul Hemani , MD, Ominitech said that they are focusing on areas of infrastructure management services and performance management services.

 

He added that their strategy is to continue to have organic growth and get some acquisitions done cross border.

 

Excerpts from CNBC-TV18's exclusive interview with Atul Hemani:

 

Q: You are looking to raise about Rs 35 crore, primarily for acquisitions. If we understand your business model, currently 60% of the revenues come in from the software side. Is this likely to change going forward? And what are the new acquisitions going to bring on the table for your company?

 

A: We are basically focusing into areas of infrastructure management services and performance management services, along with software development services.

 

Today, we believe that we have to have a two-pronged strategy. One is to continue to have organic growth and second to get on a fast track by getting some acquisitions done cross border.

 

We are already at a very advanced stage of some cross-border acquisition. We have done one acquisition last year in August 2006 and have successfully integrated that into our company.

 

Q: How big would these acquisitions be in USD million terms?

 

A: We have earmarked something around USD 5 million and are looking at an earn-out deal. So, based on the exact deal, we shall have any acquisition based on 1 to 1.5 times of the revenue size of that amount.

 

Q: Your exports, as a percentage of your total revenues, accounted for about 22%. What sort of an impact did the fluctuating rupee have on your margins and will the exports continue to stand at 22%?

 

A: No, export is likely to grow by leaps and bounds because our whole focus is in the international market besides the domestic market as well. We have already taken the initiative to set up our own branch offices in US, Japan and are going to do one in UK as well.

 

The dollar weakening has definitely impacted the IT industry in India as a whole. But we have gone back to our customers, we have proposed a modification or an amendment in our contract, where in case of any fluctuation beyond a certain percentage, we shall definitely look at the adjustment settlement outside the contract, in terms of credits or debits, to each one of us.