Quick Heal IPO may get delayed
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Bangalore: Pune-based security software firm Quick Heal Technologies Pvt. Ltd expects its initial public offering (IPO) to be delayed to July or August next year, as it is still preparing and finalizing audit reports and is aiming for a valuation between Rs.2,500 crore and Rs.3,000 crore.
The software product firm, which is aiming to expand outside India and launch newer products, had initially planned to go public by December this year or January next year.
“Around Rs.3,000 crore is what I’m expecting,” managing director and chief executive Kailash Katkar said in an interview. “We’re also trying to put the right team in place to manage all the financial accounting procedures and that is taking time.”
Quick Heal, which plans to list only in India, will soon initiate discussions with investment bankers and aim to begin the formal listing process next year, he said.
Earlier estimates from experts and investment bankers had pegged the potential valuation at about Rs.1,200 crore, although Katkar says he is confident of securing a much higher valuation for the company that he founded in the early 90s.
The firm, which counts the likes of Just Dial and Apollo Hospitals among its largest enterprise customers, plans to step up spending on advertising to woo a newer generation of consumers that prefer smartphones and tablets over traditional personal computers.
The 48-year-old Katkar said his company, which has some 1,000 employees, will spend at least Rs.40-50 crore on advertising in 2014-15, up from the Rs.25 crore it spent in the last financial year. Quick Heal also expects revenue to touch about Rs.265-270 crore, from the Rs.260 crore it posted during the last year ended 31 March.
Quick Heal, which was known as CAT Computer Services when it started out and has branches in countries like Japan, Africa and the UAE, wants to expand into the US and Europe in the next 12-18 months.
“Right now I’m trying to understand the culture of different countries,” said Katkar. “In the US, we have registered the company. Now we’re planning to set up a team over there.”
The story of Quick Heal and its origins as a hardware repair shop are now part of IT industry folklore. Katkar started his own calculator and computer repair shop in Pune, investing about Rs.15,000 from savings.
“After a point, we found that there were many people who were in the business of computer repairing and realized that we needed to become more specialized,” Katkar recalls.
His first breakthrough came when Quick Heal bagged a contract from New India Assurance in 1993. Around the same time, Katkar’s younger brother Sanjay Katkar developed the first version of the Quick Heal anti-virus, which would eventually form the basis of the future of their venture.
The brothers’ timing couldn’t have been better, as the years leading up to the dotcom bubble also saw an increase in virus and malware threats on the Internet.
“Quick Heal’s future will depend on how innovative they are, whether they can keep up with the new generation, as technology moves into the mobile and cloud” a Nasscom executive said, requesting anonymity. “They are known to be an old-school anti-virus company. Now the question to be asked is whether that makes sense for the newer world and whether they can continue to grow as fast as they did in the past.”