Moschip Semiconductor Technology Ltd

Moschip Semiconductor Technology Ltd.

Issue Opens : 3rd Jan, 2001
Issue Price: FV - Rs.10/-
Fixed Price portion: 6,69,900 equity shares
Registrars to the Issue: Karvy Consultants Limited

Issue Closes: 5th Jan, 2001
Minimum Application: 100 shares
Maximum Application: 1000 shares
Lead Managers: Karvy Investor Services Limited

Listing on: Mumbai and Hyderabad Stock Exchanges

Executive Summary

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Business

Industry Scenario

Financials

Project Analysis

Critical Success Factors

Competitive Position

Market Scenario

Recommendation

Business

Moschip Semiconductor Technology Limited was set up in July 1999, with the objective of providing Application Specific Integrated Circuits. It specialises in designing very large-scale integrated circuits (VLSIs), Integrated Circuit (IC) design, manufacturing and marketing of data communication ICs. It uses state-of-the-art development tools, and world-class fabrication facilities .

The company has expertise in the following four areas:

a. Design and development of Intellectual Properties (IPs)

b. Fabrication of the IPs

c. Packaging and Testing of the ASICs

d. Marketing and Sales

The company is promoted by Mr.K.Ramachandra Reddy, Mr.C.Dayakar Reddy and Mr.Vinay D Kumar, who are entrepreneurs with a strong background in engineering, technology and marketing.

Moschip is a 100% EOU registered with STPI Hyderabad. It can sell in Domestic Tariff Area (DTA) as per the current Exim policy.

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Industry Scenario

In the early 1990's semiconductor industry was driven by the growth of PCs. From 1996 till 1998 there had been a recession in the industry due to South-Asian crisis. There has been a resurgence in the semiconductor industry fuelled by the internet and e-commerce business from 1999 onwards.

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Financials

Assets and liabilities of the company as at 31st March, 2000 and as at 30th June, 2000 which is the last date upto which the accounts of the company have been made and audited are given below.

Statement of Assets and Liabilities
Particulars	As at 31st March,2000	As at 30th June,2000
Fixed Assets(A)	14086874	16021030
Current assets, Loans, Advances(B)	678485	44102405
Liabilities and Provisions(C)	14807839	60165915
Net Current Assets(B-C)	(14129354)	(16063510)
Miscellaneous Expenditure(E) *	44480	44480
Total(A+B-C+E)	2000	2000

* To the extent not written off or adjusted

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Project Analysis

The present initial Public Issue of Equity Shares is being made to part financed the following activities:

Setting up a state-of-the-art design centre at Hyderabad including a corporate office.
to establish marketing offices at USA and Taiwan.
to acquire design technology in the ATM and SONET area.
to finance setting up design centres in Bangalore, Pune, Chennai and Noida.
to augment working capital resources.
to meet the expenses of the issue and
to list the equity shares of the company on stock exchanges.

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Critical Success Factors

Moschip focuses on product design and development utilizing standard cell approach portable to multi foundries for processing. It is a fabless supplier of high quality, cost effective, reliable product solutions to its customers. It creates market unique and value-added semiconductor products to serve its customers' needs. The depth of knowledge in technical designs, sales and marketing, which its management team has accumulated over the years, gives expertise to maintain a competitive organisation and the ability to respond to technology advancements and changes in the market.

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Competitive Position

Since the company operates Globally, mostly catering the customer base throughout North America, Europe and Southeast Asia, companies such as Oxford Semiconductors (UK), ASP, ITE (Taiwan) are competitors in the Integrated Circuits. The company plans to face the competition, by developing its products in cheaper and cost effective manner and setting up development centres in India with state-of-the-art technology, where the manpower is available at much cheaper cost comparing to its overseas competitors. The company considers as a distinct edge over its overseas competitors.

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Market Scenario

The semiconductor market growth is being largely driven by the increasing pervasiveness of the Internet and the wireless communication products expanding such semiconductor product segments as Digital Signal Processors (DSP), Flash Memory, analog and optoelectronics.

The overall growth of the semiconductor industry will be 31% in 2000 and expanding 25% in 2001. The market is expected to continue its momentum in 2002 and expected to end up with a growth of 12% thereafter in 2003.

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Recommendation

The company is incorporated in 1999. Going by the resurgence in the semiconductor industry, boosted by the Internet and e-commerce business the future of the company looks bright.

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