123Greetings.com parent raises $5.4M by selling treasury stock
Intrasoft Technologies Ltd, which owns and operates the e-greeting cards and e-com site 123greetings.com, has raised Rs 34 crore (approximately $5.4 million) by selling over one-third of its treasury stock through bulk deals on Thursday.
It sold 6,70,000 shares at a price of Rs 510 per share. Bulk deal data show the shares were picked by a clutch of small brokerages and private investment firms from Kolkata and Mumbai.
The shares were sold by Intrasoft Beneficiary Trust, the entity that houses treasury stock of the firm. The treasury stock was created some eight years ago as part of a merger of a subsidiary of the firm with the parent. This was before Intrasoft went public in 2010.
As of June 30, 2015, the quantum of treasury stock comprised 17,50,000 shares representing 11.88 per cent of the company's equity base. Although the company's promoters take the calls on behalf of Intrasoft Beneficiary Trust, its sole beneficiary is Intrasoft Technologies.
The proceeds from the share sale would be used for expansion and growth activities related to the e-commerce business, the company said.
"The funds raised will help us expand our e-commerce business as we head towards the holiday season and continue to open up better opportunities for the company," said Arvind Kajaria, managing director of Intrasoft Technologies.
SMIFS Capital Markets Ltd acted as the investment banker to the transaction.
Intrasoft is a public-listed firm and generates revenues primarily from online advertising and online retail sales. It owns and operates 123Stores, an online e-commerce retailer, and 123Greetings.com, an online greeting cards firm.
The firm's website offers a range of electronic greeting cards, including multimedia content designed for catering to varying celebrations, occasions and other events. Its offering of over 42,000 e-cards across multiple languages covers a mix of 3,000 seasonal and everyday categories.
The company is backed by Intel Capital, which had initially invested in the firm in 2008 and currently owns 12.20 per cent stake.
Intrasoft posted a net profit of Rs 5.9 crore on sales of Rs 343 crore for the year ended March 31, 2015 against profit of Rs 2 crore on sales of Rs 149.5 crore during FY14.
Shares of Intrasoft last traded at Rs 508, down 0.18 per cent on BSE in a weak Mumbai market on Thursday. The company's share price has shot up over 10 times in the last one year. It currently has a market cap of Rs 748 crore.