Wednesday, March 16, 2011

Ramco Systems plans Rs 40-crore rights issue

Chennai-based IT consulting, products and managed services provider Ramco Systems Limited, part of the over $875-million (approximately Rs 4,000 crore) Ramco Group, is in the process of going in for a rights issue soon to raise anywhere between Rs 35 crore and Rs 40 crore, according to chief operating officer Kamesh Ramamoorthy.

“We are in the final stages of obtaining approval from the Securities and Exchange Board of India. If everything goes well, we should be announcing the issue next month, the proceeds of which will be utilised for promoting and marketing our cloud products in the global markets,” he told Business Standard.

Last year, the company launched its Ramco OnDemand ERP (RODE 2.0) on the cloud and would unveil a product for analytics on the could platform next month. Ramamoorthy said the underlying technology – Ramco VirtualWorks – on which all the company's products were built, was an architecture for cloud.
“So, any product coming out of VirtualWorks will automatically be available on the cloud. Our idea is to make available every month one new product on the cloud,” he added.

Last year, the ERP cloud product contributed two per cent to Ramco’s total revenues and is expected to yield 5 per cent this financial year. “We are expecting this trend to continue or grow in the next couple of years.” At present, the company derives 50 per cent revenues from its traditional ERP product, 25 per cent from aviation and the rest spread over other products.

Stating that the company was seeing more traction for its cloud offering in markets like India and China, especially from the small and medium businesses (SMBs), Ramamoorthy said India (40 per cent) outperformed the US (32 per cent) in terms of the overall revenue contribution and expected the Indian pie to touch 42-45 per cent in two-three years down the line.

Ramco Systems reported revenues of $37 million (approximately Rs 166.5 crore) last financial year. Its revenues for the third quarter ended December 31, 2011, stood at $ 12.67 million (Rs 57 crore). India was the primary revenue generator with 46 per cent, while the US contributed 19 per cent during Q3.

“In the last three quarters, we grew 28 per cent and expect the trend to continue this quarter as well,” Ramamoorthy said. The 11-year-old company employs 1,500 globally. Of this, the research and development strength is one-third (at Chennai), which is a good number for the company for the next two years. There will be a marginal increase of 5 per cent in R&D workforce thereon, he added.

Ramco Systems’ scrip ended the trade at Rs 101.55 on the BSE, up 3.46 per cent over the previous close of Rs 98.15.

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