Sunday, February 20, 2011

Acropetal Technologies IPO - Analysis, Recommendation, Review

Acropetal Technologies, a Bangalore based IT services provider, is coming out with an IPO of Rs 170 crore. Acropetal offers IT/ITES solutions and a broad spectrum of engineering design services to reduce product design cycle time and costs.

The IPO opens of February 21 and will close on February 24. The company has fixed price band at Rs 88-90 a share. Bids can be made for a minimum of 60 equity shares and in multiples of 60 shares thereafter.

The company intends to use issue proceeds for proposed acquisitions with the cost of Rs 55 crore, setting up of software development centre and corporate office with Rs 26.2 crore, expansion and establishment of overseas offices with Rs 19.45 crore, repayment of term loans of Rs 25 crore and long term working capital requirements of Rs 25 crore. The rest of most will be used for issue expenses and general corporate purposes.

Saffron Capital Advisors Private Limited is lead manager to the issue and Sharex Dynamic India Private Limited is the registrar to the issue.

Recommendation:
ICRA has assigned Grade 3 to the IPO which means average fundamentals. Given the volatility in the stock market, we would not recommend this IPO at this time.


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