The NetSol is the only Pakistani-based American company listed on Nasdaq since 1998 planned to raise as much as $6 million through initial public offering (IPO) to expand its services, build infrastructure and other IT products in the country. NetSol CEO Naeem Ghauri, in an interview to Business Recorder, said: "We, a global IT company, employ over 350 people in Pakistan."
The IPO on KSE is expected to raise about Rs 400 million or $6 million approximately. The advisors and underwriters to this issue is AKD Securities are about to file the listing application with the Karachi Stock Exchange (KSE) and the Securities Exchange Commission of Pakistan (SECP).
Ghauri said: "The funds raised from this offering would be used to expand our technology campus, enhancement of infrastructures, R&D, business development, and hire more personnel to meet the growing demand of our products and services. NetSol being a premium company and pioneer in IT and products, we will be able to grow our revenue exponentially that would enhance the value of shareholders investment. NetSol is CMM level 4 company."
"We do expect strong rate of return on the investment of the investors and shareholders and yield higher than comparable listed companies", he added.
Ghauri said the US stock had a high of over $75 in boom time of March 2000. Also it has a low of $0.07 in late 2002 and is now bouncing back steadily with share price last week hovering around $2.52. "The stock has shown a strong recovery in two years, but we believe our stock is quite under valued", he added.
The company reported net revenue for the second quarter of fiscal 2005 of $2.7 million, an increase of 125 percent, when compared to revenue of $1.2 million for the second quarter of fiscal 2004.
"We have continued to build on the strong results delivered in the first quarter of 2005," said Ghauri.
He said: "LeaseSoft license sales are now consistently drive revenue with its related professional services, support and maintenance providing growing, recurring revenue streams with exceptionally high gross margins."
"We are especially pleased with the removal of the going concern opinion by the auditors, which expedites the due diligence process with larger clients, providing greater opportunity for and success rates on higher value project bids."
NetSol Chairman Najeeb U. Ghauri said that the continuous improvement in cash flow, major reductions in liabilities, sustained top-line growth, and net equity were driving factors in the auditor's removal of the "Going Concern" opinion from the company's financial statements.
For the six-month period ended December 31, 2004, the company reported revenue of $4.8 million, an increase of 119 percent when compared to revenue of $2.2 million for the six-month period ended December 31, 2003.
NetSol reported net income of $78,692, or net income per weighted share of $0.01 for the six-month period of fiscal 2005, versus a net loss of $1.4 million or a net loss per weighted average share of $0.20 for the comparable six-months of fiscal 2004.
"We anticipate to maintain this robust revenue growth over the second half of 2005 as we have successfully executed on global marketing and sales initiatives, and leveraged our strategic partnerships to drive a significant increase in sales," said Najeeb said.
"The continued traction in the market from our LeaseSoft product line has been complemented by very strong performance from our telecommunications division. We are confident not only in continuing strong organic growth, but anticipate the completion of our acquisition of CQ systems will spark inorganic revenue growth in the fourth quarter of fiscal 2005", he added.
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