Both the companies have reached an in-principle agreement to this effect. Morgan Stanley would acquire the equity stake at a premium of Rs 65 per share, according to Subex Systems officials.

The telecom software firm has decided to tap the primary market with its maiden public issue worth Rs 7.28 crore opening on July 19. The issue, which would be listed in the Bangalore and Hyderabad stock exchanges, will close on July 23.

The public issue of the company comprises 9.71 lakh shares of Rs 10 each at a premium of Rs 65 per share. According to BgSE brokers, the company was re-thinking on the issue date due to the ongoing Kargil issue which pulled down the stock markets earlier.

Subex Systems, however, has firmed up its plans and decided to launch the IPO in July itselfconsidering the prevailing sentiments at the bourses on infotech stocks. When contacted, Subex Systems chairman and managing director Subash Menon told The Financial Express that the company was going ahead with the IPO as the market is ready for a public issue. "The company will repay the balance amount if the IPO is oversubscribed," he added.Following the issue, the equity stake of the promoters and associates in Subex Systems will come down to 66.11 per cent from the present 94.66 per cent. The Rs 13 crore Subex group has earmarked 0.19 per cent equity for its employees, 3.72 per cent for the employee welfare trust, while the public would be offered a 25 per cent stake in the company. The funds raised through the issue would be utilised for the company's expansion plans both in India and abroad. Apart from the IPO, Subex Systems is also availing a term loan of Rs 75 lakh from the State Bank of India, while the internal accruals would be Rs 1.04 crore.

Out of a total project cost of Rs 9.07 crore, thecompany has decided to invest Rs 3 crore in its US subsidiary which is coming up in Atlanta. Subex would inject Rs 3.66 crore for its software development facilities in the country. Subex Systems would also take up marketing of `Ranger', the company's cellular fraud management solution, in the international markets.