The offer document highlights as many as 19 risk factors. The company is tapping the public with a Rs 4-crore initial public offer (IPO) at par and is offering 40 lakh equity shares of Rs 10 each. Lead managed by Fedex Securities Ltd, the shares are proposed to be listed at the stock exchanges of Hyderabad, Calcutta and Mumbai. The IPO opens for subscription on Feb 19 and closes on February24. The company is setting up a Rs 12-crore project, which has been apprised by Bank of Madura. The project involves setting up of a software development center at Hyderabad and invest in its US subsidiary. Of the project cost, Rs 4 crore is earmarked for investment in the overseas arm, Rs 2.8 crore for hardware and software, Rs 1.4 crore for research and development, Rs 30 lakh for furniture and fixtures and Rs 25 lakh for motor vehicles. Around Rs 2.08 crore is going towards working capital requirements.

By setting up the project, IKF Software plans to provide software services like wireless data system and software engineering expertise, easy to use suite of technology enabling software products, wireless data center and one-stop customer support and product fulfillment.

However, the company is yet to recruit a majority of the required manpower and the project is likely to face a delay of about 10 months. Importantly, promoters' post-issue stake is very low at 28 per cent.

For a brief period of its operation, the company recorded a net profit of Rs 1.64 lakh on total income of Rs 8.8 lakh.