Private equity firms UTI Ventures and US-based Argonaut Private Equity are investing around Rs. 43.8 crores (around $10 mn) in Chennai-based Zylog Systems Limited (ZSL). The investment will be done through preferential share allotment. ZSL is a 12-year old IT services and outsourcing solutions company with around 750 employees in India, the US and Europe, offering services in web application, mobile computing and enterprise infrastructure management. It has a specialized product called DP Online, a depository operations and a financial accounting system.
The investments will facilitate the company’s access to clientele in new target markets. For the year ended March 2006, ZSL’s revenues stood at Rs. 257.8 crores, a 75% growth over the previous year, and its post-tax profits were at Rs. 37.13 crores.
Argonaut Private Equity has a corpus of over $2 bn and is present in India since 2003. It has invested over $75 mn in Indian companies, predominantly in the IT and other technology sectors. UTI Ventures has substantial investments in the technology and IT services sector, including Subex Systems. This is the second time that the two private equity firms have come together to invest in a single entity. Earlier, the two funds invested a total of $16 mn (Rs. 72 crores) in Koutons Retail, a Rs. 450 crore-menswear retailer.
Read The Economic Times article.
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