Newgen Software Technologies is preparing to make its public market debut with an expected issue size of about Rs 500 crore, with the Delhi-based company expected to file its draft red herring prospectus over the next few weeks.
According to two sources, Newgen Software, which provides business process management, enterprise content management, customer communication management and case management solutions, has appointed ICICI Securities and Jefferies as its lead book managers for the anticipated initial public offering (IPO).
Diwakar Nigam, managing director of Newgen Software, declined to comment.
According to the sources cited above, the company is expected to file its DRHP with markets regulator Securities and Exchange Board of India (Sebi) by early August.
It is yet unclear if private equity firm Ascent Capital and early-to-mid-stage venture capital firm IDG Ventures India, the two backers of the company, will exit -completely or partially - during the process. Both investors have invested about $25 million in Newgen Software, having first backed the company in 2014. Ascent Capital, IDG Venture India and ICICI Securities did not respond to queries sent by ET. A Jeffries spokesperson declined to comment.
The development comes at a time when the country's capital markets have touched record highs, outperforming their global peers. Separately, 2016 also emerged as a blockbuster year for IPOs, with companies raising more than Rs.26,000 crore.
According to a report published by EY in April, India and the UK were the most active regional markets in the first quarter of 2017, with 26 and 12 IPOs respectively, followed by Saudi Arabia with seven IPOs.
However, enterprise technology listings in the country have been far and few in between. Last month, Bengaluru-based telecom equipment maker TejasNetworks saw a tepid response to its public market debut, in which it raised about Rs 776 crore.
Newgen Software’s IPO plans were first reported by ET in its edition dated September 28.
At the time, CEO Nigam had said that uncertainties existed in both Indian and foreign equity markets. “While it may not be the right time to go (public) right now, six or nine months down the line would be an ideal time,” Nigam had told ET.
A handful of home-grown enterprise software companies including Druva Software and Manthan Software Services are believed to be exploring plans to list their shares on stock exchanges, signalling the rapid maturing of at least some sections of India’s startup industry.
Founded in 1992, Newgen caters to a clientele spread across North and South America, Africa, Europe, the Asia-Pacific region and West Asia. It serves customers across segments, including banking, FMCG, healthcare, pharmaceuticals, insurance and financial services.
Newgen's revenue rose to Rs 315 crore in 2015-16 from Rs 288 crore in 2014-15. The company made a profit of Rs 28.6 crore in 2015-16, up from Rs 49 crore in 2014-15, as per documents accessed from company research platform Tofler.
"Unless M&A (mergers and acquisitions) and IPO exits happen, VC funding will not grow. iSPIRT anticipates a number of technology product IPOs to happen in the coming years," said Sanjay Nagra Khan, fellow at iSPIRT, a software product think-tank.