Mumbai-based IT solutions provider Trimax IT Infrastructure and Services, backed by PE firms like Zephyr Peacock and BanyanTree Growth Capital, has filed draft red herring prospectus (DRHP) with market regulator SEBI for a public offering. Trimax is looking to sell 25 per cent stake in the issue, which also includes a partial exit by investor BanyanTree Growth Capital, which is halving its stake in the company.

Trimax offers systems integration, data centre and IT infrastructure management services. Kotak Mahindra Capital Company, Religare Capital Markets and SBI Capital Markets are the book running lead managers to the issue.

BanyanTree Growth Capital had invested Rs 25.23 crore in the company in March, 2009, through compulsorily convertible debentures which were converted into 12.52 per cent stake. The private equity fund will be selling half of its stake in the issue. Zephyr Peacock (through its second fund) and another co-investment trust had infused Rs 45 crore in the company in September, 2010, for a stake of 8.78 per cent. The promoter group of the company, led by chairman and managing director Surya Prakash Madrecha, currently owns more than 78 per cent stake.

Taking Zephyr Peacock’s investment as the benchmark, BanyanTree is already sitting on a gain of over 2.5x. While BanyanTree’s purchase price comes at Rs 52.75 per share, Zephyr (which came in 18 months later) has invested at an average cost of around Rs 134 per share. As per Trimax’s undiluted share base, Zephyr’s investment valued the company at around Rs 470-Rs 480 crore.

According to recent reports, it is looking to raise between Rs 250-Rs 300 crore, which can value the company at Rs 1,000-Rs 1,200 crore.

For the nine months ended Dec 31, 2010, Trimax reported an income of Rs 405 crore, with an EBITDA of Rs 98.67 crore. For the fiscal 2010, Trimax’s income was Rs 364.75 crore, with an EBITDA of Rs 84.27 crore.

Of the issue proceeds, Trimax plans to use Rs 122 crore for the purchase of hardware and software over the next two years. The company, which has a debt of Rs 129 crore, also plans to use Rs 24 crore from the proceeds to retire part of its loans. Trimax will further use Rs 53 crore from the IPO to purchase a new corporate office in Navi Mumbai.

Trimax has partnered with two state-owned companies, BSNL and ITI, to provide its services. The company has an arrangement to provide connectivity and other value-added IT solutions to BSNL’s end-users in terms of its telecommunication infrastructure. Trimax has also built and currently operates a data centre with ITI, which is located at the latter’s premises in Bangalore.

Trimax also offers managed services to clients like Central Bank of India, Axis Bank and Bank of Baroda. Additionally, it has provided road transport solutions to Maharashtra State Road Transport Corporation (MSRTC), besides facilitating e-ticketing and online reservation system for Brihanmumbai Electric Supply & Transport (BEST) on a BOT basis.

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