Calcutta: Cyberspace Multimedia Ltd is yet another company which is taking shelter under the Sebi clause in order to tap public. Since it does not have a three-year dividend record to its credit, Cyberspace has roped in Uco Bank for appraising and funding its project, thus complying with the Sebi guidelines.Cyberspace, which focuses on local language computing, is offering 34 lakh equity shares of Rs 10 each and the IPO is opening for subscription on July 10. Uco Bank is funding the Rs 11.22-crore project to the tune of Rs 1.15 crore.
Under the Sebi guidelines, a company has to report a distributable profit for three out of the immediately preceding five years if it wants to make an IPO.
However, Cyberspace is using another Sebi rule that companies can make an IPO if they get the issue appraised and funded (at least 10 per cent of the project cost) by a financial institution or bank.
Sanjay Varghese, the vice-president of Indbank Merchant Banking Services Ltd, agreed that the company has failed to meet the first Sebi clause but pointed that Cyberspace's project has been apprised and funded by Uco Bank.
When pointed out that the company could have waited for a year or two for the IPO, Varghese along with Anand SK, the managing director of Cyberspace Multimedia, said the public issue would give the company a much needed visibility.
``The venture cap market has changed. It is no longer the same as it used to be three months back. With the IPO, we would not only get the funds but we would get a visibility in the Indian market,'' Anand said.
According to the offer document, the company's turnover increased from Rs 8.5 lakh in 1997-98, to Rs 12.93 lakh in 1998-99 and to Rs 254.94 lakh in 1999-2000.
However, in 1997-98, it reported a net loss of Rs 0.02 lakh. A year later, profit before tax was Rs 0.06 lakh and in 1999-2000, it went up to Rs 10.99 lakh.
The current business of the company comprises of its multilingual software package called Akruti for word processing and other related applications. The software is available on nine Indian languages.
Cyberspace Multimedia is also focusing on multilingual applications for cooperative banks, credit societies and chit fund operators. It is also making software exports a thrust area for the current year and will be opening offices in the United States, Singapore and Bangalore.
The company was floated in 1996 as a marketing outfit of Aces Technologies and Aces Consulting. In March, these two companies were merged into Cyberspace Multimedia.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.