Persistent Systems announces IPO

MUMBAI, INDIA: Persistent Systems Limited, an outsourced product development (OPD) specialty company, today announced its initial public offerings (IPO) of 5,419,706 shares of Rs.10 each and has set a price band between Rs.290 and Rs.310 per share. The issue opens on March 17 and closes on March 19, 2010.

The Pune-based company has issued 4.1 million fresh shares, while part of the remaining 1.3 million are being sold by individual investors, Dr.Shridhar Shukla and Vijayalaxmi Shukla (holding shares jointly) and Ashutosh Joshi, according to a company official.

According to Dr. Anand Deshpande, Persistent Systems’ managing director and CEO, the business of outsourced product development (OPD) is different from IT services as the product development requires a lot of research and development and that involves lots of money.

“In terms of our strengths, we have technology background in the OPD space and we operate in the product ecosystem with small companies funded by venture capitalists. In terms of technology, our focus areas are enterprise mobility, cloud computing, analytics and enterprise collaboration,” Dr. Deshpande said.

Further, he informed that in the past five years the company has contributed to more than 3000 product releases for its customers and has filed about six patents. He explained that Persistent Systems works with other companies' products which are at the end of product life and then tries to give them second life to those products.

The company has 37 large customers in one billion US dollar ranges and about 85-90 per cent business comes from the existing customers, largely from the US. With this IPO, the company intends to invest the funds in expanding its development facilities, hardware and IT procurements and also to capitalize subsidiaries.

Though a large part of revenues comes from the US, the company has set up its presence in Europe and Japan. It has three facilities in Pune along with the base in Goa and Nagpur, which is under construction. The company has an employee strength of over 4500 people.

In terms of monetary state, till 31 December 2009, Persistent had Rs.150 crore cash balance and in the last five years it grew at a 42 per cent CAGR and expects 25 per cent EBITDA margins.