The company has been engaged in corporate training, placements, software development and software education in the field of ERP, E-Commerce, database solutions and GIS. The company was a franchisee of ISCT Information Technologies Limited under the brand name of ISCT. The franchisee agreement with ISCT was terminated in July 1998 and the company started training in the name of Online Software Education.
The company proposes to diversify into the field of Medical Transcription (MT) by establishing a master editing facility at Bangalore and two production units at Bangalore and Baroda. It also plans to service other medical transcription units from its editing facility.
The main objectives of the issue are
- To part finance the company's diversification project into MT by establishing a master editing facility at Bangalore and two production units at Bangalore and Baroda
- To establish an office in US
- To purchase hardware and software required for the project
- To meet the requirement for working capital.
- To meet the expenses of the Issue.
| Promoters
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Mr. K. N. Mohan Kumar, aged 33 years, is an electronics engineer with more than 7 years experience in the field of computer and software education, training and development. In 1993 he promoted Prosoft Systems, which took over the existing business of professional computers in FY94 with all its assets and liabilities and licenses and franchises.
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| Sector
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IT enabled services are emerging as one of the hottest growth segments. Today, IT enabled services (call centres, air-ticketing, pay-roll accounting, medical & legal transcription, insurance claims processing, back-office data processing, content development etc,) employ more than 25,000 people and generate about Rs. 10 bn every year. With the recent development in the telecom infrastructure, this industry is now poised for multi-fold growth and is expected to create one million additional jobs and earn an annual revenue of Rs. 810 bn by year FY08 (estimated by NASSCOM). One such opportunity is in the field of medical transcription.
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The company is proposing to open an office in USA and a sum of Rs 10 m (including pre-operative expenses such as registration, promotional expenses etc.) is earmarked in the project cost towards this purpose, for which nothing has been firmed up so far.
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There has been a four-month delay in implementation of projects, which puts forth the inability to execute on time.
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The MT industry is totally dependent on the need of the American health care industry for its survival and progressive performance.
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Promoters are not experienced in the line of business and have to depend on others for business procurement. But the proposed US office may help alleviate this problem to certain extent.
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The company is diversifying to a new area i.e. Medical Transcription, which is highly competitive and capital intensive segment. Prosoft will have to face competition from companies like General Electric, which puts forth the intensity of competition.
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The core promoters' has negligible stake in the entire project cost. Pre-issue promoters' holding is at 16%, which would go up to 24% post-issue.
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Where the money comes from... |
| (Rs m) |
(%) |
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Share capital |
40 |
35% |
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Term Loan |
13 |
11% |
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Public Issue |
61.6 |
54% |
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Total |
114 |
100% |
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Where the money will go... |
| (Rs m) |
(%) |
| Building |
10 |
9% |
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Plant & Machinery |
24 |
21% |
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Furniture & Fixtures |
14 |
12% |
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Motor vehicles |
4 |
4% |
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Misc. fixed vehicles |
5 |
4% |
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Data communication facility |
1 |
1% |
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Deposits |
2 |
1% |
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Technical know how |
4 |
3% |
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US Office establishment |
4 |
3% |
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Prelimenary and Pre-op Exp. |
27 |
24% |
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Contingencies |
10 |
9% |
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Working capital |
10 |
9% |
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Total |
114 |
100% |
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| Particulars |
Pre-Offer (%) |
Post-Offer (%) |
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Promoter group |
11 |
24 |
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Other Investors and friends |
89 |
16 |
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NRI's |
- |
15 |
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Public |
- |
45 |
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Total |
100 |
100 |
