Neoteric Infomatique : The IPO Advantage

In February 2008, Neoteric Infomatique went for a public issue of 70 lakh
shares, marking its entry into the club of channel companies that have gone
public. The company decided to retain 58 percent ownership of this capital and
utilized close to Rs 1 crore of this raised funds acquire its corporate office
on a three-year lease agreement in Mumbai. It will use another Rs 1.2 crore to
open new branches and spread its base in the country.

The distributor posted a turnover of Rs 603 crore in 2007-08, up from Rs 550
crore the previous fiscal. This was just a mere nine percent in growth terms, a
steady decline from its growth rate of 25 crore in FY 2006-07. Of course the
wild fluctuations of the rupee could be the culprit behind this, because
approximately 40 percent of Neoteric's purchase is through imports where
payments have to be made in foreign currencies.

During FY 2007-08, Neoteric discontinued its long-standing distribution
alliance of Kodak digital cameras, which had contributed to approximately 20
percent of its revenues in the 2006-07. The company stated that this
discontinuation was to improve its overall profitability because the segment was
showing trend of declining profit margins, but it could also be due to Kodak's
decision to work more with the photographic channel than the traditional IT
channel.

The contribution of its top five vendors to its overall turnover has been
steadily dropping over the past two years-from 71 percent in 2006-2007 to 68
percent last fiscal. This could also be due to the addition of more brands in
the last fiscal. It tied up with Acocent for KVM switches, Imation for removable
storage devices, Moser Baer for optical disc drives, Alcatel-Lucent for
networking and Secure Computing for security, last fiscal.

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Profile
MD: Paras Shah Start-up year: 1997 Employees: 420 Collaborations: Alcatel-Lucent, Apple, Asus, Avocent, BenQ, Brother, Corel, Hitachi, HP, Iomega, Imation, LaCie, Lenovo, Logitech, Moser Baer, Maxtor, Samsung, Secure Computing, Toshiba, Umax, Wacom, Wipro Address: 21/A Film Center, #68 Tardeo Road, Mumbai - 400034 Tel: 022-40859600 Website: www.neoteric.co.in SILVER CLUB RANK (2006-07): 7

Neoteric also crafted a team that would work closely with leading large
format retailers (LFRs) and tied up with nearly 25 of these LFRs. Some of these
include Crome, Hypercity, Reliance Digital, Next, Vijay Sales, Home Solution,
etc.

Currently the company has 36 branches having their stocking locations, four
logistic centers and four additional warehouses catering to over 7,200 channel
partners in more than 350 cities. It also has its international business
operations in Shenzen (China), Singapore, Vietnam and SAARC countries like
Pakistan.