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NT Bureau
Chennai, July 21:

        Zylog Systems Ltd, an IT solutions company, is entering the capital market with a public issue of 36 lakh equity shares at a price brand in the range of Rs 330 and Rs 350 per equity share of Rs 10 each.

        The company would utilise the net proceeds of the issue to set up two offshore development centres (ODCs), fund acquisitions, strategic investments and meet the increasing requirement for working capital. Zylog Systems has two global ODCs in Chennai and New Jersey, US, and was in the process of ramping up its infrastructure. The company has purchased over an acre of land in the IT corridor at Sholinganallur, near Chennai, and has begun construction of nearly 80,000 sq ft fully equipped ODC with modern facilities to service offshore projects at an estimated cost of Rs 24 crore. The ODC would have a seating capacity for 800 IT professionals.

        The company has also been allotted two acre of land by SIPCOT at the Siruseri IT Park where it would build a second ODC of 1,250 seat capacity at an estimated cost of Rs 42 crore.

        Zylog Systems has received Rs 44 crore towards the preferential allotment of equity shares to Investment Advisory Services of Unit Trust of India and Argonaut Ventures in March 2007. A term loan of Rs 13 crore has been sanctioned by Union Bank of India of which Rs 7.6 crore was already utilised for the ODC at Sholinganallur till 15 June 2007.

        Total income of the company had registered a 66 per cent growth from Rs 147 crore in 2004-05 to Rs 408 crore for the fiscal ended March 2007. Also, the net profit stood at Rs 55 crore in the last fiscal, a growth of 56 per cent from Rs 18 crore recorded in 2004-05.