Pune-based mid-sized IT company Nihilent Technologies Ltd has received approval from the Securities and Exchange Board of India for its proposed initial public offering (IPO).
The firm, which offers consulting and IT outsourcing services, had filed its draft red herring prospectus with the capital markets regulator for its IPO in December.
The company is looking to raise as much as 140 crore (about $21 million) through a fresh issue besides an offer for sale that will see its existing Indian promoters selling part of their stake.
Nihilent is 69.16 per cent 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. This comes across as an interesting and rare case of a firm majority owned by international firms going public in India.
The company plans to use the proceeds of the IPO toward potential acquisitions and strategic initiatives, to repay debt, to purchase IT software, hardware and network equipment for a development centre in Pune and to upgrade its corporate office. It also plans to use the money to develop new software platforms and the remaining for other corporate purposes.
Nihilent had recently acquired a 51 per cent stake in Intellect Bizware Services. It had said in its IPO prospectus that it would also use the net proceeds to acquire the balance 49 per cent stake in Intellect.