KGSIL for VC funding before going for an IPO

CHENNAI: KG Information Systems (KGISL), the Big B in the Medical

Transcription industry in Tamil Nadu, is looking for Venture Capitalist funding

for diversifying and expanding its business. Coimbatore-based KGISL is looking

at around $6 million to expand its medical transcription business and design

engineering services in the high end CAD segment catering to the automotive and

aerospace sector. KGISL is also thinking of diversifying into medical billing

and medical claims processing. It has decided to go for an IPO in six months

time.

"We have been discussing with three-to-four venture capitalists in

Mumbai and Bangalore. The deals should come through in a couple of months. It is

good to have funding from multiple VCs so that risks are spread out. And it is

easier to bring in funds in the latter stage," said, KGISL managing

director Ashok Bakhtavathsalam.

"We are looking at investments beyond the seed stage in medical

transcription. We have proved that the concept works and now needs funding to

move faster on the growth path in the medical transcription industry. In the

design engineering services, we want to increase our staff strength from 25 to

100 and in the software services from 300 to 1200. We would like to be a

multi-product company in a year's time," he added.

KGISL had contributed Rs 15 crore out of the net Rs 21 crore revenue the

industry clocked last fiscal in Tamil Nadu. It has grown from a buyer-supplier

partner of Heartland Information Services with 27 people in 1998 to become the

joint venture partner of Heartland Information Services, and has about 340

systems and 1200 transcriptionists now.