Datamatics In Talks To Divest Up To 10%

Mumbai, March 6: | Updated: Mar 7 2003, 05:30am hrs
Leading business process outsourcing (BPO) company Datamatics Technologies Ltd (DTL) is in talks with a slew of private and strategic players to sell up to 10 per cent of its equity capital. The BPO major plans to complete the deal by December 2003 and use the proceeds to consolidate its BPO business. The paid-up equity capital of DTL (Rs 5 paid-up) is Rs 15 crore.

Mr RR Panickar, CFO, Datamatics Technologies Ltd, told FE: We are on the lookout for a private/ strategic player and the plan is to sell about 5 to 10 per cent of the equity capital. We have valued our company in the range of Rs 350-500 crore, he added.

By taking into consideration the valuation report, the strategic deal will fetch DTL around Rs 35-50 crore for the 10 per cent stake.

On the selection process of the strategic investor, Mr Panickar said: The company is scouting for those private players who can bring proper value to the company because of its expertise in the relative field, or players who are likely to increase DTLs value.

He said, By the end of 2003, we expect to complete the private placement and a likely initial public offering (IPO) by 2004. With the US markets in bad shape, the IPO will most probably be targeted towards domestic investors.

Earlier in 2000, DTL had planned to make a debut in the secondary market. However, due to lacklustre primary market conditions, lower valuations and a dwindling appetite for IT-related companies, the plan was scrapped.

Mr Panickar said: Along with BPO, we are also planning to make a foray in call-centre business. However, unlike a slew of existing plain vanilla call centre houses, the company plans to be a hybrid solution provider.

On its revenue, Mr Panickar said: Currently, 70 per cent of DTLs revenue comes from the US and the rest from Europe. In the current fiscal (2002-03), DTL expects a revenue in the range of $18-$20 million, out of which 60 per cent will be from its local operations and the remaining from its overseas subsidiary, Saztec International Inc.