Credit rating firm ICRA Ltd said on Friday it has struck a deal to sell its software development arm, ICRA Techno Analytics Ltd, to IT firm Nihilent Technologies Ltd for Rs 68.75 crore ($10.3 million).
Pune-based Nihilent, which had filed for an initial public offering in December last year, will pay Rs 32 crore in cash. The mid-sized IT firm will also subscribe to 10% interest-bearing unlisted non-convertible debentures to be redeemed one year and 15 days after the issuance.
ICRA Techno is a wholly owned subsidiary of Moody’s-controlled ICRA and is involved in software development, its implementation and post-implementation support services in the areas of business intelligence, business analytics, enterprise, web content management and ERP implementation.
It generated revenue of Rs 73.04 crore, or a little over a fifth of ICRA’s consolidated business for the year ended 31 March 2016. It had a net worth of Rs 87 crore as on 31 March. ICRA said the sale of the unit will allow it to focus on its core business.
Nihilent, which received regulatory approval for its IPO in February, offers consulting and IT outsourcing services. Nihilent is 69.16% owned by Hatch Investments (Mauritius) Ltd. Hatch is an investment holding company jointly controlled by NTT-owned firm Dimension Data Protocol BV and South Africa’s Adcorp Professional Services Ltd.
Hatch was previously part of Nedbank Africa Investment Ltd, which had originally backed Nihilent with Rs 30 crore in funding. The Indian company is looking to raise Rs 140 crore through a fresh issue besides an offer for sale that will see its existing Indian promoters selling part of their stake in its proposed IPO.
Nihilent is a rare case of a firm majority owned by international firms going public in India.
Like this report? Sign up for our daily newsletter to get our top reports.