The company is demanding Rs 5 on application and Rs 5 on allotment. The shares are proposed to be listed at the stock exchanges of Bangalore, Delhi and Hyderabad.

The IPO is to part-finance a Rs 5.59-crore project. Canara Bank, which is the apprising authority besides lead managing the issue, is advancing a term loan of Rs 56 lakh (10 per cent of the project cost). The project involves setting up a branch office in USA at a total cost of Rs 40 lakh, offices in Mumbai and Chennai, a software development centre at Bangalore and expansion of the management team. However, the company is yet to identify premises for setting up the offices.

The company is investing Rs 68.5 lakh in land, Rs 65.48 lakh in building, Rs 81.88 lakh in IT infrastructure and machines and Rs 91.15 lakh in fixed assets. Of the issue proceeds, Rs 66 lakh is earmarked for working capital requirements.

Although Kals Information Systems has been in the field of software for the past seven years, the company's operation so far has been on a very small scale. From a turnover of Rs 77.8 lakh for fiscal 1997, the company earned a net profit of just Rs 95,000. In the following fiscal, turnover rose to Rs 1.37 crore and net profit increased to Rs 5.59 lakh. For fiscal 1999, net profit further increased to Rs 9.49 lakh on a turnover of Rs 1.78 crore.The unaudited results for the nine-month period ended December 31, 1999 show a sudden jump in net profit to Rs 35.75 lakh on a turnover of Rs 1.41 crore. For fiscal 2001, the company has projected a net profit of Rs 2.49 crore on sales of Rs 8.31 crore and for fiscal 2002, respective figures are Rs 4.73 crore and Rs 15.75 crore.

Kals is engaged in providing desgin, software development in insurance and implementation services (including insurance software services, workflow and document imaging, web enabled applications and insurance domain consulting). The company offers softwares like E-IAS, a web based insurance product and LA-Vision. However, these softwares are yet to be patented. Kals has provided the insurance software for CMG Asia Life Assurance, Hongkong.Promoters will have a 29.79 per cent stake post-issue, while their freinds will hold 25.81 per cent. NRIs will hold 7.59 per cent of the post-issue capital of Rs 6.77 crore and OCBs 10.81 per cent.