Hyderabad, Jan 25: The Hyderabad-based high-end communication solutions provider, Avantel Softech Ltd (ASL) has proposed to diversify into software development, with an initial investment of Rs 9.90 crore. To part-finance the proposal, ASL making an initial public offer (IPO) of 13,38,500 equity shares of Rs 10 each at a premium of Rs 40, aggregating to Rs 6.69 crore. The issue opens on February 10.Issue proceeds will be utilised to set up an overseas subsidiary, Avantel Softech Inc., in US and to improve off-site communication facilities in India to take up development projects from US, Europe and South East Asian countries, the company said. Originally promoted in 1993 as a private limited company, ASL has been involved in design, development and manufacture of components required by the wireless industry. Later, it started manufacturing multi-access rural radio systems for DoT.
The company plans to buy land in Hi-tech city to set up a 100 per cent export-oriented development unit. According to ASL managing director A Vidyasagar, the company has successfully completed network management software for the HDSL equipment and is developing a various embedded software for real-time applications.
ASL pioneered development of Hi-bit Rate Digital Subscriber Line (HDSL), which is an import substitute. The company has obtained Rs 6 crore worth orders from DoT, MTNL and private operators, Vidyasagar said. As per the projections made by Canara Bank, the lead manager to the public issue, ASL will post a turnover of Rs 28.15 crore and a net profit of Rs 3.74 crore and turn over Rs 38.74 crore, net profit of Rs 5.95 crore for the years 2000-01 and 2001-02, respectively.
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