IT solutions provider Mouri Tech files draft papers for Rs 1,500-crore IPO

Mouri Tech IPO

IT solutions and services provider Mouri Tech has filed preliminary papers with the capital markets regulator SEBI as it plans to raise Rs 1,500 crore via an initial public offering.

The IPO comprises fresh issue of equity shares worth Rs 440 crore, and an offer-for-sale of shares worth Rs 1,060 crore by existing shareholders, as per the draft papers filed on September 25.

Promoters Sujai Paturu, and Anil Reddy Yerramreddy will be selling shares worth Rs 615 crore, and Rs 316 crore, respectively in the offer-for-sale. Non-promoter Srinivasu Rao Sandaka intends to offload equity shares worth Rs 129 crore.

Promoters hold 88.67 percent stake in the IT company and the remaining shares are owned by the public shareholders including Srinivasu Rao Sandaka, the Chief Technology Officer of MT USA who has 11.02 percent shareholding.

The Hyderabad-based company may also consider fund raising of up to Rs 88 crore in a pre-IPO placement, before the launch of initial public offering. The said amount will be reduced from the fresh issue size if the company manages to complete pre-IPO placement.

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Mouri Tech will spend Rs 165 crore out of the net fresh issue funds for repaying debt of its subsidiary MT USA, and Rs 125 crore for its working capital requirements. Further, the remaining funds will be utilised for inorganic growth through unidentified acquisitions and general corporate purposes.

With presence in USA, EMEA, and India, the IT solutions company operates in four segments - intelligent enterprise resource planning (iERP), enterprise digital transformation, infrastructure services, and program management.

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Digital transformation and iERP segments accounted for 44 percent and 41 percent, respectively, to the revenue in FY24, followed by infrastructure services, program management and others which contributed the remaining to the revenue.

The US customers contributed little more than 82 percent to the revenue in fiscal 2024, and the remaining business generated from India and the EMEA region (Europe, Middle East and Africa). It had 337 active clients at the end of March 2024.

Anil Reddy Yerramreddy, and Sujai Paturu-promoted company that competes with listed peers like Persistent Systems, Mphasis, Coforge, Birlasoft, Sonata Software, Zensar Technologies, and Happiest Minds Technologies recorded consolidated net profit at Rs 167.3 crore for the year ended March 2024, growing 4.6 percent from Rs 160 crore in the previous year. Revenue from operations during the fiscal 2024 grew by 3.8 percent to Rs 1,141.3 crore YoY.

On the operating front, EBITDA (earnings before interest, tax, depreciation, and amortisation) in fiscal 2024 increased by 9.3 percent to Rs 242.9 crore and margin expanded by 110 bps to 21.3 percent compared to previous fiscal.

Nuvama Wealth Management, ICICI Securities, and JM Financial have been appointed as the book running lead managers to the issue.