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Intel Capital will see its stake shrink from 16.3% to 12.2%, post IPO. The company operates 123greetings.com.

Intel Capital-backed online greeting cards firm Intrasoft Technologies, which operates under the brand 123greetings.com, is looking to raise around Rs 35-37 crore through a public issue offering. The IPO, which would dilute its equity base by around 25.12%, would translate into a valuation of around Rs 150 crore ($ 32 million) for the company.

Intel Capital holds around 16.3% currently which would get reduced to 12.2% post IPO. It had invested a sum of Rs 20 crore in the company through convertible preference shares in 2007. At the issue price expected to be close to Rs 100/share, it would be sitting on a marginal discount of about 11% to the cost of acquisition per share of around Rs 111 (after accounting for bonus issue).

Kolkata-based Intrasoft is promoted by Arvind and Sharad Kajaria. For the year ended March’09, the company posted an income of Rs 23 crore with a net profit of around Rs 5.3 crore. On a diluted equity base at Rs 100 per share, the issue will value the company at price earnings multiple of around 27 on FY09 numbers which is more than the valuation attached to Infosys on its FY09 numbers.

Moreover, its valuation also looks stretched when compared to closest competitor in the offline space Archies (which incidentally is backed by BCCL). Archies has a market cap of Rs 52 crore despite it being over five times the top line and double the profit last year.