Zylog Systems plans IPO; embarks on Rs 66.7cr expansion

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Chennai-based Global IT services provider and a 100% EOU Zylog Systems, ZSL has embarked on an expansion drive by setting up of two state-of-the art Offshore Development Centres. It also plans acquisitions and strategic investments.
 
ZSL services includes IT outsourcing services, application services, managed services, business intelligence and data warehousing, mobile computing services, QA and testing services and BPO services.

ZSL's customer base is spread across a wide spectrum and they include names like Barclays, Field Power, Metlife, Volt Telecom, Lehman Brothers and JP Morgan Chase.

Zylog intends to invest Rs 66.71 crore to set up two Offshore Development Centres (ODCs) at Sholinganallur and Siruseri to enable it to increase its offshore business.

The company also plans to spend on acquisitions, which are a strategic fit and in line with its future goals. This will help Zylog deepen its domain expertise, expand service lines, obtain access to new markets / verticals and enhance its technology footprint. These acquisitions will also result in several benefits for Zylog, namely, positive contribution to revenue and profitability, expansion in clientele, cross selling opportunities and increase in offshore business. 

To part finance its expansion plans, the company soon proposes to enter the capital market with a public issue of 36,00,000 equity shares of Rs 10 each through the book building route. The company has filed the draft red herring prospectus (DRHP) with Sebi. Motilal Oswal Investment Advisors is the book running lead manager, while Karvy Computershare is the registrar.
 
Zylog Systems focuses on providing technology services in line with client specific requirements. These services are performed onsite/offsite/offshore or in combination depending upon the clients' requirement, nature of engagement and the nature of the project. An ISO 9001:2000 company, Zylog continuously leverages cutting edge tools, methodologies and benchmark standards to exceed the expectations of its customers.
 
The company earns almost a third of its revenue through partnerships with systems integrators/solution providers and value added resellers (VARs). This unique business model over a period of years has resulted in specialization and focus on industry verticals such as Telecom, BFS and Retail which are prominent contributors to the business.