iGate to delist from India stock markets

BANGALORE, INDIA: Despite the Indian stock markets reaching a new height crossing the 18,600 barrier on Wednesday, iGate Global Solutions Ltd (iGS), US-based flagship subsidiary of iGate Corporation Inc has announced its intension to delist its offshore subsidiary from the Bombay Stock Exchange, National Stock Exchange and the Bangalore Stock Exchange.

iGS, a leading provider of offshore IT services and BPO services, under relevant Indian laws, can be delisted after iGate and its affiliate iGate Inc acquires over 90 percent of iGS’s common stock. Presently iGate and iGate Inc own 81.1 percent of iGS.

Talking to CIOL, Phaneesh Murthy, chief executive officer of iGate Global Solutions Ltd said, "Since most of our clients are based in the US, we will focus more on the Nasdaq, thus offering US stock options to the employees. As per the procedure, we will call for EGM on November 13 and also get the approval from the regulatory body. Since only a small portion (18.9 percent) of the stocks are with the Indian shareholder, it should not be a problem to push the delisting issue and we expect it to be completed by this year end."

Once consummated, the purchase of the publicly-held shares in connection with the delisting will be done in accordance with the delisting guidelines of the Securities Exchange Board of India (SEBI) through shareholder-led reverse book building process. 

Raising Rupee: 

The rupee appreciating against the dollar has affected iGate as well. However, company officials maintain that they have long term hedge deals of two to three years tenure contracted to manage expected Indian rupee appreciation against the US dollar. "Good hedging policy has helped us," said Murthy. 

Expansion plans: 

iGate has proposed executing Phase IV of its expansion plan at Whitefield near Bangalore. The new enclosure at an investment of Rs 120 crore that will come up adjacent to the existing campus will be built in two phases. Out of the total built up areas of 350,000 sq ft, the first phase will be built on 110,000 sq ft of land and is expected to be completed 12 months from commencement. "The President’s rule in the state is hindering the environment clearance by the government,’’ said Murthy. 

FY 2007-08 Q2 results: 

 iGate for the second quarter ending September 2007 has announced the revenues of Rs 200.8 crore compared to Rs 202.6 crore in the corresponding quarter in the previous year. The net profit for the second quarter increased to Rs 22.9 crore, up 127 percent from Rs 10.1 crore in the second quarter of FY07. EPS grew to Rs 7.25 from Rs 3.26 in the same quarter previous year. 

New employment: 

iGate employs 5977, just short of 6,000 employees in India spread across Bangalore, Chennai and Hyderabad and likely to add 600-800 more employees from October 2007 to March 2008. 

Company’s vision: 

The company aims to achieve $1 billion and be among the top 10 best employers in India working with hundred global 1,000 customers. "We have set this target for 2012 and looking at the way the things are going, we feel we are on the right track," adds Murthy.