Kolkata : Globsyn Technologies Ltd's initial public offer of Rs 14.77 crore"devolved" when financial institutions refused to support it and themarket's response was also poor. Marketmen attributed the failure tooverpricing, which is being denied by the company.Two days prior to the closing, the management of the software services andeducation company realised that the IPO will be falling short by nearly Rs2.5-3 crore, and called off the issue. This spoils the company's chances tolist on the National, Bombay, Delhi and Calcutta Stock Exchanges.
In Indian tech stock history, Globsyn's IPO is one of the very few likeIT&T's to have failed.
Another section of the market supported Globsyn's version that its IPObecame a victim of the recent volatility in tech stocks on Nasdaq and evenon the Indian bourses. However, this view will be credible only if a similarfate befalls the public offers of three more companies that have eitherclosed or are scheduled to do so - Datum Technology Ltd, e.star Infotech andD-Link.
In fact, the IPO of Chennai-based iQ Software Ltd - which closed a daybefore Globsyn's IPO opened and was priced at Rs 16 (including Rs 6 premium)- was "marginally oversubscribed", according to its managing director KRSrinivasan.
Though the stakeholders have reposed "faith" in the company and its promoterBikram Dasgupta, they feel that the company "has to prove itself beforehitting the market again". However, some of these stakeholders' plan tooffload part of their holdings during this aborted IPO, stands shelved forthe time being.
The company said it has "abandoned" the IPO, though the announcement camesix days after the issue closed on February 20. Company sources maintainthat the IPO plan was called off a couple of days prior to the February 20closing, when it was clear that the FIs are unlikely to honour the firmcommitments made before the issue opened. The sources said five to six FIshad made firm commitments to support the issue.
According to a company statement, it is opting for the debt route to fundits plans, which remain unchanged. The company sources noted that though theFIs were unwilling to subscribe to the issue, they have agreed to extendloans.
Prior to the issue, UTI/IFCI Venture Capital Funds Ltd and promoter BikramDasgupta held 16.54 per cent each in Globsyn, followed by EmpireInternational Holdings with 9.66 per cent, Fortune Secfin 8.34 per cent, BDGGlobal 6.42 per cent, Smifs Capital 5.25 per cent, Romit Leasing 4.41 percent, Mackertich Consultancy 3.83, Ranjana Dasgupta and GTL Esop Trust 3.31and 2.76 per cent respectively.
UTI/IFCI Venture Cap invested into the company on February 3, 2000, moppingup five lakh shares at Rs 36.71 and later on March 31, 2000, picked byanother two lakh shares at Rs 21 each. On the other hand, the promoterspicked up 9.78 lakh shares on March 31, 2000 and another 71,500 shares onApril 7, 2000, at Rs 21 each.
GTL Esop Trust also picked up 2.50 lakh shares on March 31, 2000, at Rs 25per share. The management followed this up with a 1:1 bonus issue on August31, 2000. Under the bonus issue, 9,06,92,000 equity shares were issued afterwhich the cumulative paid-up capital is 18,13,84,000 equity shares.Globsyn's offer document notes that its wholly-owned US subsidiary hasreported a loss of Rs 1.84 crore ($392,852) during the nine months toSeptember 30, 2000.
The document also discloses among other things that two of its students -Divesh Kumar and Devi Prasad Puhan - have filed cases against the company'sfailed placement promise.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
