Of the 90 lakh shares, 16.2 lakh shares at a price of Rs 65 are reserved for mutual funds/banks/FIs on competitive basis and 1.3 lakh shares are reserved for employees on a firm allotment basis. Net offer to the public is 72.5 lakh shares. Post-issue, the paid up capital will increase from Rs 9.9 crore to Rs 14.49 crore. While the core promoters will hold 38.69 per cent of the post-issue paid up capital, promoter group, their friends, relatives and associates will hold 30 per cent. Public and others will have 30.58 per cent stake in the company.

The company is now setting up a Rs 72.71-crore project. The project involves setting up a fully owned subsidiary in USA for strengthening the manufacturing and marketing of TFM; acquisitions for strengthening the communication, networking navigational aids, SCADA and telemetry business; setting up in-house software facilities and setting up a new design and integration and test facilities for strengthening the networking and communication business.

The company has earmarked Rs 5.7 crore for setting up the manufacturing facility for surface mount technology products used in communication, Rs 2 crore for the software development facility, Rs 1.8 crore for the design and integration and test facility, Rs 7.5 crore for investment in the foreign subsidiary, Rs 17.5 crore for acquisition of businesses in the related field, Rs 20 crore for prepayment of foreign currency loans, Rs 12.7 crore for working capital requirements, Rs 2.76 crore for preliminary and capital issue expenses and Rs 2 crore as contingency. Hence, of the total project cost of Rs 72 crore, only Rs 2 crore is going towards software development which is even lower than the amount earmarked for issue expenses. A major portion of the project cost, i.e., Rs 58.5 crore, is being met from the issue proceeds and Rs 14.21 crore is coming from internal accruals.

Although Arraycom's name gives the impression that it is mainly into internet or software business, the company is operating on a very small scale in the field of software. In fact, the company has only started recently its software development activities in the areas of GIS software, communication software, LINUX based networking software, embedded software, etc. The company was developing software for inhouse requirements and now plans to target customers in this segment. The company, formerly Parekh Micro Electric, had changed its name to the current one in January 2000. A major portion of the company's turnover has hitherto been from from industrial electronics and trading in communication products.

Now, the company has vertically integrated its operations from the manufacture of basic electronic materials to offering turnkey solutions in the areas of communications and IT in the form of products and integrated systems. The company's operations in communication and IT relate to products such as navigational aids, SCADA, telemetry, WAN, etc. The focus is on tailor-made solutions which involves combination of hardware, software and system integration.

The customers for its communication products include defence organisations, railways, paramilitary forces, municipal corporations, airport authorities, petroleum and oil companies, etc. The company has alliances with Tellabs International, USA, Denro Inc, E I Dupont, De Neumours & Co USA, ABK Electronics PTE Ltd, Singapore, ICOM Inc, Japan, Hagnuk GMBH, Germany, Roctest (Canada), Megallan, USA, etc. However, the company is heavily depending on one customer, ABK Electronics Pte Ltd, Singapore for majority of its sales income. The Singapore-based company accounted for 71 per cent of Arraycom's total sales and 99 per cent of exports for fiscal 1999. Another factor is that a sizeable 20 per cent of income for the nine-month period of fiscal 2000 came from trading operations and other income.