BackHCL Info to raise funds by Oct, sees festive boost
HCL Info to raise funds by Oct, sees festive boost
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Mumbai: HCL Infosystems plans to raise up to Rs8.2 billion by selling shares and warrants to fund expansion and acquisitions, and sees the festive season reviving sales from October, an official said.
“The IT hardware firm would garner up to Rs5 billion by placing shares with qualified institutional investors and a further Rs3.2 billion by issuing warrants to promoters," chairman Ajai Chowdhry said on Tuesday.
“We will use the funds to set up back-end facilities for our system integration and services business," Chowdhry, who is also HCL’s chief executive officer, said adding: “We will also look at acquisitions to fill the gaps in these businesses."
“HCL would look at setting up such back-end centres in several cities, including Noida, Chandigarh, Kolkata and Mumbai," he said adding: “The warrants would be issued by the first week of October, while the share sale would take 4-5 weeks."
“HCL, which sells personal computers, servers and offers system integration services amongst others, had formed a team to scout for acquisitions," he said adding: “It is still very early days to talk about it."
FESTIVAL PUSH
Last week, the company posted a net profit of Rs2.4 billion for the year ended 30 June, down by a fifth over a year earlier, as sales were hit by the global downturn.
“However, the hardware and retail markets had seen an improvement in the September quarter," Chowdhry said.
“In the first quarter, we have seen the market come back, both in the hardware business and the retail business, but I expect that the real take off will be from about next month onwards, when the festival season kicks in," he said.
“It is also pinning its hopes on securing system integration contracts for various power and e-governance projects and is looking to widen its presence in the education sector," he added.
However, earlier in the day, J.P. Morgan downgraded the company’s shares to neutral from overweight and said that the consumer personal computer business was still slow and it expected handset sales to remain below subscriber numbers.
HCL has a distribution deal to sell Nokia’s phones in India.
The company’s shares ended 5% lower at Rs160.3 in a Mumbai market that ended up 1.5%.
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