Fatipe Network Withdraws IPO On Poor Response
Fatpipe Networks has withdrawn its initial public offer (IPO) due to poor response.
It received only 88% of the subscription till the close of the issue yesterday.
The IPO money was to be used to expand its product line, to set up 16 marketing offices worldwide including the US, for strategic acquisitions and working capital needs.
Keynote Corporate Services was the sole book running lead manager to the issue.
Transaction Reference: ET
Incorporated in 2002, Chennai based Fatpipe Networks India Limited manufactures a range of appliances based on its technology for data transmission over multiple lines that provides highly reliable and redundant Internet/Intranet access solution available. It also offers data security with encryption protocols.
The Company’s clients includes top law firms, luxury hotels, several Fortune 1000 companies, banks, educational institutions and government entities.
For 2008-09, it posted profit after tax of Rs 3.99 Cr on total turnover of Rs 42.3 Cr. For period April-September 2009, it posted profit after tax of Rs 4.61 Cr on total turnover of Rs 29.57 Cr for the same period. It had debt of Rs 0.90 Cr as on September 2009.
In 2008, Fatpipe was merged with Ragula Systems Development based in Utah company. Ragula raised fund through various venture capital firms which are now shareholders of Fatpipe.
It raised Series A funding of $1 m from Draper & Associates, Wasatch Ventures and UTFC Financing Solutions($0.5 mn) in 1995-96. In 2002 it raised Series C funding from vSpring.
The present shareholding in Fatpipe includes promoters Sanchaita Datta (16.60%) and Ragula Bhaskar (16.09%), vSpring (22.12%), Wasatch Ventures (8.85%), Draper & Associates (3.99%) and others.
Last month, Tara Health Foods too withdrew its IPO due to poor response. Atherstone Capital Markets Limited was the lead manager for Tara’ IPO.
However last month five IPO’s saw satisfactory response - Jaypee Infratech, SJVN, Mandhana Industries, Tarapur Transformers and Nitesh Estates.
Many companies are planning for IPO in the months to come - YOU Broadband and Cable India ltd, One97, Kabirdass Motor Company Ltd, Luminous Power Technologies, UCO Bank (Follow on Pubic Offer) and many others.
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KVEZAR VIEW
| Date | Transaction | Type | Buyer | Size ($mn) |
|---|---|---|---|---|
| 15/06/10 | Fatpipe Networks - IPO | IPO / Offerings | 10.50 |
| Date | Type | Buyer | Target | Size ($mn) | State |
|---|---|---|---|---|---|
| 17/05/12 | Private Equity | Looking For | Prizm Payment Services Private Limited | 92.18 | Planned |
| 17/05/12 | M&A | Carzonrent India Private Limited | QCABS | - | Announced |
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| 17/05/12 | M&A | Trivone Digital Services Private Limited | WheelsUnplugged.com | - | Completed |
Company |
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| Name | Promoters | Office | Competitor | Website |
|---|---|---|---|---|
| Fatpipe Networks India Limited | R Bhaskar Sanchaita Datta |
3rd Floor,Northern Wing, Greams Dugar No.64, Greams Road, Chennai-600006. | Vakrangee Softwares Limited | www.fatpipeinc.com |
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