Onward Technologies, a leading global player of mechanical engineering design and information technology consulting services, on May 27, has considered and approved the raising of funds of Rs 702 million from funds advised by Convergent Finance LLP ('Convergent').
Structured as a subscription to equity shares and warrants priced in accordance with applicable SEBI regulations, the investment will aggregate up to Rs 702 million will result in an approximately 24.78% ownership stake on a fully diluted basis. Customary closing conditions, including shareholder approval, will apply.
Commenting on this development, Jigar Mehta, Managing Director of Onward Tech, welcomed the investment by saying, "This investment is a vote of confidence for the Onward Tech team, reinforcing the tremendous growth underway within our organization. Harsha and his team have an excellent track record of value creation, and we look forward to working closely with the Convergent team.
Onward Tech is already a cash positive company & the objective of raising additional cash is to strengthen our presence in India, USA and Europe. Our new international subsidiaries in Netherlands and Canada will also become fully functional next quarter. On the home front, after a successful launch in Bangalore in Jan 2021, we plan to expand our portfolio of services into new territories Hyderabad and Noida in 2021, where we see a major opportunity of growth."
Devanand Ramandasani, CFO of Onward Tech said, "We have gone through a roller-coaster last few quarter with the pandemic. In-spite of Covid-19 and challenges from WFH, the company has shown strong resilience and hired 500 engineers across the digital & engineering services verticals to support our fast-growing multinational OEM customers. This new investment will help us accelerate both organic & inorganic growth opportunities in the digital ER&D industry."
Harsha Raghavan, Managing Partner at Convergent, commented, "Onward Tech is one of the oldest and most well-established IT service companies, founded by the visionary Harish Mehta, a pillar of the Indian IT services industry since the ‘70s. As we move forward into the digital era, we are extremely excited to partner with Onward Tech team, now led by his son Jigar Mehta.
At Convergent, our motto has always been to help great companies become global leaders, and Onward Tech exemplifies this approach. We will look to use our global networks, strategic insights and operational expertise to help transform Onward Tech into a global leader in engineering R&D and digital transformation."
Centrum Capital is acting as the sole financial advisor and DSK Legal is acting as legal advisor to Onward Technologies for this assignment.
Shares of the company gained Rs 19.65, or 13.15%, to trade at Rs 169.10. The total volume of shares traded was 69,955 at the BSE (10.43 a.m., Thursday).
