Turnaround Play? 3i Infotech Bets on ₹100-Crore Rights Issue to Power Growth.
~Sumon Mukhopadhyay.
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Introduction:
Founded in 1993 and headquartered in Mumbai, 3i Infotech Limited is a global IT services provider with over three decades of expertise in digital transformation.
With a workforce exceeding 4,300 professionals and a client base spanning India, North America, the Middle East & Africa (MEA), and Asia-Pacific (APAC), the company operates across three strategic verticals:
🔹Infrastructure Services (cloud and cybersecurity),
🔹Application-Automation-Analytics, and
🔹Business Process Services .
In FY25, 3i Infotech posted consolidated revenues of ₹725.75 crore (India: ₹335.80 crore; US: ₹287.34 crore; MEA: ₹74.98 crore; APAC: ₹27.63 crore) and achieved a net profit of ₹25.3 crore, marking a significant turnaround from a ₹313.6 crore loss in FY24.
To reinforce this recovery, the company has proposed a rights issue of up to ₹100 crore aimed at bolstering working capital and supporting strategic growth initiatives .
Sectoral View of India’s IT and BPO Industry in 2025:
🔹Economic Contribution and Growth:
India’s IT and Business Process Outsourcing (BPO) sector continues to be a pivotal driver of the national economy. In FY23, it contributed approximately 7.5% to India’s GDP, with projections estimating a rise to 10% by 2025, reflecting its increasing significance. By 2025, the sector’s revenue is expected to reach US$350 billion, with exports accounting for a significant portion, solidifying India’s position as a global IT hub. The industry employs over 5 million professionals, making it one of India’s largest job creators, with a focus on both direct employment and ancillary economic impacts.
🔹Market Size and Investment:
IT spending in India is projected to grow to US$150 billion in 2025, up from US$138.6 billion in 2024, driven by robust demand for digital transformation, cloud computing, artificial intelligence (AI), and cybersecurity solutions. Domestic IT spending is expected to grow at a CAGR of 11–12%, fueled by government initiatives like Digital India and increasing enterprise adoption of emerging technologies.
Cloud migration remains a key focus, with public cloud spending projected to increase by 25% annually as businesses prioritize scalability and cost efficiency.
🔹Industry Evolution and Key Drivers:
The Indian IT sector has transitioned from a low-cost outsourcing model to a hub for innovation and high-value services. Companies like TCS, Infosys, and Wipro continue to lead global tech exports, contributing over 50% of India’s IT export revenue. In 2025, the sector is witnessing accelerated adoption of AI, machine learning, generative AI (GenAI), and cybersecurity solutions, driven by global demand for digital-first strategies.
The rise of Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) models has further positioned Indian firms as leaders in cloud-native solutions. Additionally, the sector is benefiting from increased investments in data analytics, Internet of Things (IoT), and blockchain, catering to banking, healthcare, and manufacturing industries.
🔹Challenges and Opportunities:
Despite its growth, the sector faces challenges such as a talent crunch, with a reported shortage of 1.5 million skilled professionals in AI and cybersecurity by 2025. Geopolitical uncertainties and evolving global trade policies are prompting clients to diversify outsourcing destinations, creating competition from countries like the Philippines and Vietnam.
However, India’s vast talent pool, cost advantages, and established infrastructure maintain its edge. Upskilling initiatives, supported by NASSCOM and government programs, aim to bridge the skill gap, with over 500,000 professionals trained in emerging technologies in 2024 alone. The sector also sees opportunities in serving India’s domestic market, with SMEs increasingly adopting IT solutions to digitize operations.
Competitive Landscape and 3i Infotech’s Position:
Major players like TCS, Infosys, and Wipro dominate the sector, but mid-tier firms like 3i Infotech play a critical role in niche areas such as banking, financial services, and insurance (BFSI), education, and infrastructure management. 3i Infotech, with its focus on cloud services, cybersecurity, and business process services, aligns with the sector’s growth in digital transformation and analytics. Its ₹100 crore rights issue in 2025 aims to capitalize on these trends by strengthening its financial base to meet rising demand.
Conclusion:
In 2025, India’s IT and BPO sector is poised for robust growth, projected to contribute 10% to GDP and reach a market size of US$350 billion, driven by digital transformation, cloud adoption, and AI innovation. While challenges like talent shortages and global competition persist, India’s strategic focus on upskilling and innovation ensures its leadership in the global IT landscape. For companies like 3i Infotech, leveraging these trends through targeted investments positions them to capture opportunities in both domestic and international markets.
Rights Issue: Strategic Overview:
The company plans to raise ₹100 crore via a rights issue of equity shares (face value ₹10 each). While specifics—such as issue price, entitlement ratio, and key dates—are still pending finalization, the board has approved the fundraise and formed a Rights Issue Committee to determine the final terms .
The proceeds are earmarked for working capital enhancement, strategic expansion, and financial flexibility. This capital raise follows a notable rebound in FY25, which included a PAT of ₹25.3 crore and a positive Q4 performance with PAT of ₹26.9 crore, operating revenue of ₹187 crore, and marked improvement from the ₹99.9 crore loss in Q4 FY24 .
Applications are expected to be facilitated through ASBA (via internet banking or UPI) and physical forms, with a registrar to manage shareholder communications. A Draft Letter of Offer (DLOF) is in preparation, and terms will include entitlement ratio, record date, issue price, and listing details .
The rights issue is set to be listed on both BSE and NSE, subject to regulatory approvals. Promoter participation may be restricted—IDBI Trusteeship Services (trustee for ICICI Strategic Investments Fund) currently holds no shares and may not be entitled—highlighting reliance on public investor participation for a successful issue
Bottomline:
3i Infotech’s rights issue marks a strategic inflection point—designed to capitalize on its FY25 recovery and expand its digital services footprint.
As India’s IT sector scales globally, such capital initiatives could enhance the company’s competitiveness and operational agility. Investors should closely monitor official disclosures for the final terms, record date, and timeline to assess participation.
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