Onward Technologies Ltd is raising Rs 70.2 crore ($9.7 million) from funds advised by Convergent Finance LLP, the private equity outfit set up and led by former Fairfax executive Harsha Raghavan.
Convergent will subscribe to equity shares and warrants and will end up owning approximately 24.78% stake in the company on a fully diluted basis.
The deal is subject to customary closing conditions, including shareholder approval.
Centrum Capital Ltd is the sole financial advisor and DSK Legal is acting as legal advisor to Onward Technologies on the deal, the companies said.
Onward Technologies is already a cash-positive company and the objective of raising additional money is to strengthen the firm’s presence in India, US and Europe, Jigar Mehta, managing director, said.
International subsidiaries in the Netherlands and Canada will become fully functional next quarter, Mehta added.
“On the home front, after a successful launch in Bengaluru in January 2021, we plan to expand our portfolio of services into new territories of Hyderabad and Noida this year, where we see a major opportunity for growth,” he said.
The investment will also help accelerate the company’s inorganic growth strategy in the digital engineering and R&S space, finance chief Devanand Ramandasani said.
"In spite of Covid-19 and challenges from work from home, the company has shown strong resilience and hired 500 engineers across digital and engineering services verticals to support our fast-growing multinational OEM customers,” he added.
Raghavan, managing partner at Convergent, said the investment firm would use its global networks, strategic insights and operational expertise to help Onward Technologies.
Onward Technologies provides digital and engineering services in areas of mechanical engineering, electronics and embedded systems development, data analytics and digital transformation, robotic business process automation and enterprise business application support services to global corporations.
The company has a team of 2,000 full-time employees with offices in Mumbai, Pune, Chennai, Bengaluru in India and Chicago, Troy, Cleveland in the US, London in the UK and Frankfurt in Germany.
