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Compudyne defers rights issue

Abhrajit Gangopadhyay

BANGALORE, Feb. 6

MULTIMEDIA software maker Compudyne Winfosystems Ltd. has deferred its plan of issuing rights share following volatility in the stock market, its Chairman and Managing Director, Mr S.S. Dahiya, has said. The company will seek shareholders' nod through an extraordinary general meeting for a private placement issue in near term as the last approval has expired. "Merchant bankers told us not to proceed with the issue in the current weak market", Mr Dahiya said.

Fears of US-led invasion of Iraq were contributing to the elongation of sales cycles that could restrict a surge in top line growth for the current quarter as well as the fiscal, Mr Dahiya said. "A big project is held up following this Iraq crisis", Mr Dahiya said. Most of the clients that Compudyne caters to are based in US. They were likely to hold back any major expenditure till the war clouds over West Asia vanished, he added. Moreover, travel advisories would also hurt business growth in case of a war, he said. "We are now working mainly with Bollywood productions as big businesses from Hollywood are frozen on war fears", he added.

"We will be happy if we maintain last year's revenue", Mr Dahiya said. The company reported a net profit of Rs 4.996 crore over total income of Rs 28.198 crore in the last financial year. However, in the first nine months of operations in the current financial year 2002-03, the company reported a top line of Rs 15.284 crore and net profit of Rs 1.371 crore. Hence, even to maintain last year's numbers, the company needs to generate a total income of Rs 12.914 crore in the fourth quarter.

Earlier, Compudyne had said that it planned to raise Rs 25 crore by privately placing a part of its equity with financial institutions and overseas corporate bodies. Accruals would be used to fund its new multi-media studio in Bangalore.

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