Newgen Software raises $20 mn from Goldman Sachs, other anchor investors

By Ankit Doshi

  • 15 Jan 2018
Newgen Software raises $20 mn from Goldman Sachs, other anchor investors
Credit: Shah Junaid/VCCircle

New Delhi-based IT firm Newgen Software Technologies Ltd has raised Rs 127.38 crore ($20 million) by selling shares to a bunch of anchor investors including Goldman Sachs and hedge fund Forefront Alternative Investment Trust ahead of its initial public offering.

Newgen allotted 5.19 million shares at the upper end of the Rs 240-245 per share price band, according to a stock exchange filing.

Home-grown capital and wealth management firm Alchemy Capital Management, Malabar India Fund, BNP Paribas Arbitrage and Societe Generale also came in as anchor investors.

The anchor investors also included SBI Mutual Fund, Aditya Birla Sun Life Trustee Pvt. Ltd.

Anchor investors are institutional investors who accept a one-month lock-in period for a sizeable allocation of shares and support a public offering. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.

Newgen is seeking a valuation of Rs 1,696.27 crore ($266.08 million) through the IPO.

At the upper end of the price band, the company will issue 3.87 million fresh shares, besides the sale of 13.45 million shares by existing shareholders comprising promoters and PE investors.

The total IPO size is about Rs 425 crore ($66.66 million) and will result in 25.03% stake dilution on a post-issue basis.

The company had filed its draft prospectus with SEBI on 27 September. It received the regulator’s nod on 17 November.

The firm will use the proceeds from the fresh issue towards purchase and furnishing of office premises in Noida. It will use the balance amount for general corporate purposes.

ICICI Securities, Jefferies India and IDFC Bank are merchant bankers managing Newgen’s IPO.

Newgen offers a software platform that enables customers to develop applications for their businesses. The platform comprises enterprises content management tools that help digitise content and information, business process management and customer communication.

It earns revenues from multiple streams such as the sale of software products, annuity-based revenues from various fees such as SaaS (software as a service) subscription fees, annual technical and annual maintenance charges, among others. The company had over 450 customers in over 60 countries as of 30 June 2017.

Its key clients include Trust Company of America, Mercantil Bank, ICICI Bank, Trafigura, Bajaj Electricals, United Arab Bank, National Commercial Bank Jamaica, Axis Bank, Yes Bank, Kotak Mahindra Bank, Bank Islam Brunei Darussalam, Philippines Resource Saving Bank, ICICI Prudential Life Insurance, Reliance General Insurance, Max Life Insurance, Strides Shasun and Shriram Transport Finance.

The firm claims that its solutions have been used by leading global businesses in various sectors including banking, government/PSUs, BPO/IT, insurance and healthcare.

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