In this paper we will discuss about GSS America Infotech IPO, both the advantages and risks. The company plans to open several new delivery centers in India as well as in US. Therefore, the company wants to fund those projects by issuing an IPO.
GSS America Infotech plans to issue its initial public offering (IPO) in this year. The share price will be ranged between Rs 400 to 440.
The company had been established in 2003. It is a IT solution provider whose clients are mainly based in America.
The gross revenue generated by GSS America during the financial year 2007 was Rs 204.6 crores. Moreover, the net profit amount was Rs 43.8 crores.
Offerings:
The company offers IT solutions mainly in three areas.
- Enterprise application integration.
- Product development.
- Information technology infrastructure management.
Objectives Behind the IPO:
GSS America Infotech aims to open a new center in Hyderabad. It also is going to establish several new delivery centers in the US. For these reasons, GSS America wants to collect a huge amount of money through public issue.
Risks:
GSS America has some vulnerable areas for which certain amount of risk is associated with its public issue. These are:
- The company depends hugely on US for revenue. Therefore, it may suffer due to US recession or sudden fall in dollar price.
- All projects run on a contractual basis. Therefore, any time there is a certain chance of getting these contracts terminated by the clients.