Allied Digital Services has entered the capital market on 2nd July, 2007 with its public issue of 45.22 lakh equity shares of Rs.10 each in the price band of Rs.170 to Rs.190 per share.
The company is into providing I.T. Solutions and IT services with six strategic business units of I.T. Solutions, Networking/Communication Solutions, Integrated Solutions, Software Solutions, I.T. Services and Remote Management Services. For FY 07 total income of the company was placed at Rs.156.42 crores while PAT was at Rs.22.93 crores, resulting in an EPS of Rs.18 on pre-issue equity of Rs.12.77 crores.
The company has now embarked on a capex of Rs.104 crores mainly to set up global service delivery centres, setting up new strategic Business Units and is also eyeing acquisitions, upgrading and expanding its existing infrastructure. Rs.15 crore is being mobilized from term loans while rest from proposed issue and any shortfall is to be funded from internal accruals.
The company proposes to set up a 250 seater Technical BPO with back up business activities and support. Over 35,000 sq. ft space is earmarked for which allocation of Rs.32.97 crores is being made. The company is also planning acquisitions in India and abroad to enhance its position as a global player in IT infrastructure solutions and services industry on Application Management, IT Security solutions and T - BPO segment.
The company has grown over 75% in topline and over 90% in bottomline in FY 07. The financial performance, upto FY 05, was nothing great, despite topline being at Rs.52 crores in FY 05. The company has also placed shares to Benett Coleman @ Rs.101 per share (post-bonus) while to others at Rs.120 and Rs.130 in January 07.
However, considering the business models and financial performance of the company for FY 06 and FY 07, the future of the company looks promising and infusion of about Rs.85 crores from the issue would further ramp up the company's performance. Even at the upper band of Rs.190, investment in the issue is recommended.