Infosys eyes Europe, Japan for acquisitions

Infosys Technologies is scanning the markets of Europe and Japan for acquisitions in the price band of $200-$300 million to energise its non-linear business strategy as well as to expand its geographic reach.

“We are looking at acquiring companies in Germany, France and Japan. These markets have started opening up and we are targeting companies engaged in consulting, BPO, packaged implementation services or IP-based firms as it will help us move up the value-chain considerably,” said Infosys CFO V Balakrishnan.

Unlike the traditional linear business model, where the revenue is effort-based (more the number of people working, more the revenue), the non-linear business model is based on outcome.So, with high-value services, the companies can demand a premium from its clients.

Last year, Infosys had taken over Philips’ finance and administration business process outsourcing (BPO) centres spread across India, Poland and Thailand for $28 million.In 2003, it had acquired Expert Information Services in Australia for $22.9 million.

Read more in The Economic Times article.

Infosys linked to buyout talks for UK's Sage

Infosys Technologies is in the thick of yet another European buy-out rumour --this time involving the UK-based Sage Group.British publications have reported that Sage's stock price on the London Stock Exchange went up on Tuesday on talk that Infosys, CapGemini orsoftware giant Microsoft may be interested in acquiring the company.

The publications said that a couple of institutions picked up shares in Sage even as retail investors in the Britain were rushing out of banking-related stocks following the run on Northern Rock bank.

Headquartered in Newcastle upon Tyne, the Sage Group is a supplier of accounting, payroll, CRM and business management software for large, medium and small size enterprises.

Read more in The Times of India article.

Infosys, Wipro in race to buy US analytics firm: report

Infosys Technologies and Wipro, India's second and third-biggest software firms, are competing to purchase a US analytics firm in a deal valued at up to 160 million dollars, a report said Friday.

The Bangalore-based firms have shown early interest in buying New Jersey-headquartered MarketRX -- the first time they are both targeting the same acquisition, the Economic Times cited unnamed sources as saying.

The eventual purchaser would be able to tap MarketRX's established and potentially lucrative practice in analytics, including people trained in diverse branches such as mathematics, statistics and accountancy.

Read more in The DNA Money article.

Genpact, 2 others in race for Citi BPO unit

Citigroup has shortlisted three bidders for its business process outsourcing (BPO) unit after the first round of bidding.

The sale of the BPO business, run by Citigroup Global Services (formerly e-Serve), is expected to fetch around Rs 3,200 crore for the group. At this price, it will be the largest deal in the domestic BPO space.

The shortlisted bidders are Firstsource, WNS and Genpact, said sources close to the development. Others who had expressed initial interest, including IBM, Automatic Data Processing (ADS), Infosys, EDS, Capgemini and private equity players such as Blackstone and General Atlantic, are no longer in the race.

The largest major deal in the BPO space so far was when Blackstone recently bought Intelenet from Barclays and HDFC for Rs 840 crore.

Read more in The Business Standard article.

Infosys in global BPO deal with Philips

Infosys Technologies on Wednesday signed a multi-million dollar outsourcing contract with Netherlands' Royal Philips Electronics. As part of the agreement, Philips will enter into a multi-year contract with Infosys BPO to provide finance & accounting services and the processing of purchasing orders.

Infosys will also acquire three shared service centers located in India, Poland and Thailand from Phillips.

The contract is amongst the largest finance & accounting BPO engagements from India and will expand Infosys' global network, particularly strengthening its European operations, Infosys said in a notice to NSE.

Read more in The Economic Times article.

Infosys to buy Philips Global's finance BPO

IT major Infosys Technologies is set to acquire Philips Global’s finance and accounts BPO for an assured revenue of $200 million spread over five years.Infosys will be taking over the subsidiary along with all the costs in the similar manner that TCS had acquired the operations of the Pearl Group in the UK.

According to informed sources, once the takeover is completed, Infosys will bring down costs and restructure operations to make it a paying proposition.This will be Infosys’ second acquisition in its 25-year history, after it had acquired Expert Information Services in Australia for around Rs 104 crore ($22.9 million) in 2003.

The acquisition of Philips will bolster the capabilities and reach of Infosys’ BPO, enabling it to deliver round-the-clock. Philips’ F&A captive has operations in Chennai, Warsaw (Poland) and Bangkok. The global staff strength of the captive is around 1,500 with 500 employees working out of the Chennai centre, which was set up in 2004.

Read more in The Business Standard article.

DLF shares rise 11%; 8th most valued firm

Shares of DLF Ltd jumped 10.85 per cent in the real estate major's second coming to the capital market, making it the eighth most valued firm on the bourses in terms of market capitalisation.

The scrip listed at Rs 582 on the Bombay Stock Exchange against the issue price of Rs 525 and soared to a high of Rs 714.25, briefly propelling the market value to over Rs 100,000 crore.

Billionaire KP Singh-promoted DLF, which had delisted from Bombay Stock Exchange in 1982, was ahead of ICICI Bank and State Bank of India in terms of market cap. Only Reliance Industries, ONGC, Bharti Airtel, NTPC, Infosys, TCS and Reliance Communications had higher market value on BSE.

In the first 15 minutes of trade, the scrip reported turnover of around Rs 330 crore as around 60 lakh shares changed hands on the BSE.The company had offered 17.5 crore equity shares through 100 per cent book-building process. The proceeds of the issue, which got oversubscribed 3.5 times, would be deployed to meet costs of construction, land acquisition and repayment of debt.

Read more in The DNA Money article.

Infosys scrip surges 2% on BSE over takeover news

Shares of country’s leading software exporter Infosys surged as much as 2.54% on the Bombay Stock Exchange after media reports that the software behemoth is planning to bid for European consultancy firm Capgemini.

Infosys scrip opened firm at Rs 1,951 and rallied ahead to touch a high of Rs 1,975 in early trading on the BSE, gaining as much as Rs 49.10 over its previous close.
However, the scrip of the company parted with some gains and was later trading at Rs 1952.30 at 10.34 am on BSE and over 68,000 shares got exchanged in early trade.
Yesterday, the French firm Capgemini’s scrip surged more than 4% on the Paris bourse over reports that Infosys Technologies is planning to acquire a stake in the company to expand its global presence.

Infosys has a market value of nearly $27 billion, while Capgemini has a market capitalisation of about 10 billion dollars (7.7 billion euro).

Onmobile plans Rs 600 cr IPO

The Bangalore-based value-added services (VAS) provider OnMobile is planning to tap the capital market with an initial public offering (IPO) of Rs 500-600 crore.

The company’s maiden offer is expected to open during the current financial year and it intends to invest the proceeds for its foray into the Wireless Application Protocol (WAP) and General Packet Radio Service (GPRS) segments.The company is gearing up to become an end-to-end VAS solution provider, according to sources close to the development.

If OnMobile succeeds in raises around Rs 500 crore, it will be the one of the largest IPOs in the VAS sector. The company, headed by its founder and CEO Arvind Rao, is believed to be posting annual revenues of around $50 million (around Rs 210 crore).According to industry analysts, the company has an estimated value of around $300 million (around Rs 1,250 crore).

The company was incubated by Infosys Technologies in 2000, and at present the IT major holds a 14 per cent stake in it.Global investment banking majors Deutsche Bank and Goldman Sachs, the UK-based private investment firm Polygon Investment Partners and venture capital firm Argo Global Capital are the other investors in the company. However, the percentage of stakeholding could not be ascertained.

Read more in The Business Standard article.

WNS, Accenture join race for Citi`s BPO arm

The race for Citigroup Global Services, the business process outsourcing arm (BPO) of Citigroup is hotting up with the entry of the BPO firm WNS and consultancy firm Accenture.

Sources close to the development said these were the latest entrants into the fray. The list of suitors includes IBM, Automatic Data Processing (ADS), Infosys, EDS, Genpact, Capgemini and private equity players such as Blackstone and General Atlantic. A Citigroup spokesperson declined to comment.

Although there was no official confirmation on the impending sale of Citigroup’s business processing arm, sources in the know said Citi might receive Rs 3,000 crore from divesting this non-core area of its business.

Sources said Citigroup might sell 80 per cent stake in the BPO firm currently and pull out at the time of listing after divestment. Citigroup might induct a strategic partner for the BPO arm, they added.

Citigroup Global Services, which changed its name from e-Serve in November, employs close to 8,000 people in Mumbai and Chennai.

Read more in The Business Standard article.

Citi to exit, captive BPO units no longer attractive

The captive outsourcing story is turning sour .. or so it appears with the latest market buzz that Citigroup is on its way to pull out of its local business process outsourcing (BPO) unit Citigroup Global Services (formerly eServe).

While Citigroup continues to maintain that "the bank's policy is not to respond to market speculation," industry sources say "it makes logical sense for Citigroup to exit the business since it's not core to its operations".

The BPO currently has close to 8,000 people spread over two centres in Mumbai and Chennai. Some of the names floating to acquire the business include IBM, Automatic Data Processing (ADS), Infosys, EDS, Genpact, Capgemini and private equity players like Blackstone and General Atlantic.

When contacted, Genpact denied comment saying that it is in silent period. While IBM and Capgemini, too, maintained the no-comment stance, a senior Capgemini official, on condition of anonymity, said: "We have studied Citi Global services, it seems to be a decent company and has a good set up." The official, however, was concerned about the valuation of the Citi's BPO arm, which market rumours pegged at $1-1.2 billion.

Read more in The Business Standard article.

IBM, ADP, Genpact, Infy in race for Citi’s BPO biz

The first round of bids for Citi’s business process outsourcing operations — Citigroup Global Services (formerly known as e-Serve) — is likely to be completed this week. A host of global IT companies and also private equity firms are said to be in the initial race. However, Citi is likely to look at selling part of its operations only to a strategic partner, given the sensitivities involved in the deal.

According to sources, IBM, Automatic Data Processing (ADP), Genpact, Infosys and private equity firms such as Blackstone and General Atlantic are in the race for Citi’s BPO business.

Citi is likely to follow the Genpact model, where it is likely to sell off over 50% stake in the BPO firm. It is, however, likely to retain a part of the stake in the firm so that they can not only get the benefits in case of a future listing but would also handhold the firm. According to sources, one of the main reasons that the group is looking at bringing in a strategic partner is to bring down the overall costs and not monetising the stake.

Read more in The Economic Times article.

Infosys to invest Rs 306 cr in T`puram facility

Infosys Technologies has firmed up plans to invest Rs 306 crore for setting up its first campus in Thiruvananthapuram.

Speaking on the occasion, K Dinesh, co-founder and member of the Infosys board, said the new campus would create 8,000 seats over the next couple of years.

The existing facility at the Technopark campus in Thiruvananthapuram has a capacity of 1,100 seats and has seen an investment of Rs 30 crore, as of March 31, 2007. Infosys has also leased 40,000 sft of space in the Thejaswini Block at Technopark for expansion.

According to Achuthanandan, Infosys Technologies' expansion in the state reaffirms the fact that Kerala is emerging as a key IT destination in the south.

N Radhakrishnan Nair, CEO, Technopark, said: "The initiative marks the take off of Technopark to the trajectory, considering the infrastructure problems and the social tensions in traditional tier-I infotech locations. We will see a number of big league IT and ITeS companies expanding to Technopark and Kerala to benefit from the manpower resources."

Infosys Q4 net profit jumps 69%, beats f'cast

Leading software services provider, Infosys Technologies today posted 69.27 per cent increase in net profit at Rs 1,124 crore for the quarter ended March 31, as compared to Rs 664 crore for the year-ago period.

The total income of the company increased by 43.38 per cent to Rs 3,675 crore for the fourth quarter ended March 31, from Rs 2,563 crore for the corresponding quarter a year ago, Infosys informed the BSE.

Highlights of Infy's Q4 show

1. Infosys declares final dividend of Rs 6.5 per share

2. Infosys Q4 net profit Rs 1124 cr versus 983 cr Q-o-Q

3. EPS growth seen at 22.6%

4. Infosys projects EPS at Rs 80.29-81.58 for this fiscal

5. 4 Offshore salary hike projected at 12-18%

6. Infosys adds 34 new clients, 3992 employees worldwide

7. IP Global Services to show strong growth: Nilekani

8. Infosys factors Rupee value at 43.10 visa-viz dollar

9. Infosys projects revenue growth at Rs 17300 cr for 07-08


For the year ended March 31, the company posted a net profit after tax & exceptional items of Rs 3,783 crore as compared to Rs 2,421 crore a year ago.The total income has increased to Rs 13,524 crore for the year ended March 31 from Rs 9,172 crore in the year-ago period.

The company declared a final dividend of Rs 6.50 on shares of Rs 5 each (130 per cent).

Read more in The Economic Times article.

TCS looks at foreign listing

Tata Sons, the holding company of the Tata group, is considering a $1 billion-plus (over Rs 4,300 crore) overseas equity sale in Tata Consultancy Services (TCS) this year to fund acquisitions of other entities.

Banking sources said the equity offer may take place in six months and include a fresh share offer as well. The group is examining the pros and cons of listing on the major exchanges, including London, Luxembourg and New York stock exchanges.

A listing on the New York Stock Exchange, where other software giants – Infosys, Wipro and Satyam — are listed, gets immediate attention from global brokerages. But the flip side is the time-consuming compliance norms under the Sarbanes-Oxley regulations.

Bankers said raising funds through an equity sale in TCS makes sense as Tata Sons holds a 78.35 per cent stake in the country’s largest software company. As a policy, Tata Sons chips in with funds whenever any group entity makes a major acquisition.

For instance, Tata Sons is expected to contribute to Tata Steel’s $12.15 billion purchase of Anglo-Dutch steel company Corus, although a major chunk of the money will be raised through debt.

Read more in The Business Standard article.