Persistent Systems files IPO papers with SEBI

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Persistent Systems, a technology company specialising in outsourced software product development (OPD), has filed the draft red herring prospectus (DRHP) for the third time with the Securities & Exchange Board of India (SEBI). It has planned a public issue of 54,19,706 equity shares of Rs 10 each. 

The issue consists of a fresh issue of 4,139,000 equity shares and an offer for sale of 1,280,706 equity shares by Dr Shridhar Bhalchandra Shukla & Vijayalaxmi Shridhar Shukla and Ashutosh Vinayak Joshi. The issue comprises a reservation of up to 541,976 equity shares for eligible employees and the balance to the public. The issue will constitute 13.55% of the fully diluted post issue paid-up capital of company.

It is an OPD specialty company, offering customers the benefits of offshore delivery. It designs, develops and maintains software systems and solutions, creates new applications and enhances the functionality of customers' existing software products.

Promoters' stake will reduce to 38.83% from 43.31% post issue. Institutions like Intel Mauritius, Norwest FVCI Mauritius and Gabriel II will dilute their holdings to 19.67% from 21.94%. Intel 64 Operations and Hewlett - Packard Company will also dilute their holdings.

The objects of the issue are to (a) establish development facilities; (b) capitalise subsidiaries for establishing development facilities and meeting fit outs and interior design costs; (c) procure hardware; (d) fund expenditure for general corporate purposes and (e) achieve the benefits of listing on the Stock Exchanges.

For the year ended March 31, 2009, the company has reported net profit of Rs 66.09 crore on total income of Rs 600.68 crore. For the period of six months ended on September 2009, it has posted net profit of Rs 44.45 crore on total income of Rs 273.91 crore. It is a debt free company.

The book running lead managers to the issue are Enam Securities Private Limited and JP Morgan India Private Limited. Link Intime India Private Limited is the registrar.