IT PEOPLE (INDIA)

IT People (India) is entering the capital market on 27th August, 2007 with an issue of Rs.45.25 crores by way of equity shares of face value of Rs.2. This is follow on public offer by the company, under the new management. The company went public in 2000 in its old name of Balwas-e-Com India Ltd, of Rs.3.50 crores, and no promises could get fulfilled. The shares of the company are now ruling in the range of Rs.37 to Rs.38 and price band would be announced by the company in its board meeting, scheduled for 24-08-2007. But there is really no need to wait for the band announcement, as the foregone conclusion on the issue is a big "NO" for investment. The company is providing HR services to IT, ITES and BPO companies by e-recruitment but financial performance has been pathetic. For FY 07, the total income was at Rs.17.51 crores, with PAT of Rs.3.08 crores on an equity of Rs.10.66 crores, giving an EPS of just 58 paise, on Rs.2 face value. June 2007 quarter had total income of Rs.7.51 crores with PAT of Rs.1.09 crores giving an EPS of just 20 paise. Now, the company has chalked out a capex plan of Rs.45.25 crores which is being financed by the proposed issue. The major allocation is for general objects like working capital and marketing and business expansion of Rs.28 crores. When topline itself is of Rs.30 crores, annually, with debtors of about Rs.3 crores, why a requirement of Rs.10 crore, additional working capital? Also, what kind of fund allocation is required of Rs.18 crores, for business and marketing expansion ? Maybe, trying to capitalise on booming market. But now tides have taken a turn and plans of the company may not materialise. The company had serious issues of corporate governance in the past. Even group company, Orient Information Technology had no major commercial activities. This company, For FY 07 had an income of Rs.11.30 crores with net loss of Rs.14.40 crores on equity of Rs.17.85 crores. The total losses on 31.03.2007 were Rs.37.73 crores. So what kind of performance can be expected from this company. Just forget the issue and give it a miss.

IT PEOPLE (INDIA)

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