However, the catch lies in the fact the company went in for a major equity dilution during the beginning of the current financial year. If the expanded equity of Rs 8.31 crore is adjusted, price-earning multiple works out to as high as 19.2. Post-issue, the equity will further expand to Rs 11.48 crore. The company is projecting a net profit of Rs 8.75 crore on a turnover of Rs 35 crore for fiscal 2000. On an equity base of Rs 11.48 crore, the projected EPS is around Rs 7.62. This discounts the offer price of Rs 120 by a multiple of 15.74 which is still high. Considering all this, the offer price seems to be a biton the higher side. However, the managing director of the company, Vipul Jain, does not feel so: ``The offer price is justified as Kale Consultants is a product-based company and our company should not be compared with others in the industry.'' The investors can still consider investment in the IPO for short-term gains and one should always look for an exit opportunity after the company's listing.

Kale Consultants is in the business of building and marketing enterprise application software products and related support services to chosen vertical industries like banking, airlines and healthcare. In the ariline segment, the company caters to 16 clients worldwide and in banking, the company has 31 clients including both domestic and global.

Except Kale Consultants, promoters' track record in other ventures (including subsidiaries) is not very impressive. Kale Software International Pvt Ltd, a subsidiary of the company, made a loss of Rs 3381 as on March 31, 1999 (accumulated losses as on March 31, 1999 Rs1.83 lakh). Virtual Wizards Pvt Ltd reported a loss of Rs 1.44 lakh for fiscal 1998 (total accumulated losses as on March 31, 1998 Rs 1.5 lakh) and Kale Consultants (a partnership firm) recorded a loss of Rs 26,523 for fiscal 1998. Shree Ganesh Agencies reported a loss of Rs 8,142 for fiscal 1998.

The IPO is to finance strategic acquisitions (Rs 15 crore), working capital requirements (Rs 7.3 crore), investment in the overseas subsidiaries (Rs 4 crore), strengthening the infrastructure (Rs 5.7 crore) and to repay the loans of the company (Rs 3.9 crore).