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Our Bureau

The criteria for setting up land banks would be availability of skilled manpower and infrastructure.

Mr Keshav R. Murugesh

Chennai , Nov 7

SYNTEL Inc, the US-based information technology company with development centres here, plans to acquire land in Tamil Nadu, Andhra Pradesh and Maharashtra as a prelude to expanding its operations.

According to the Syntel Chief Operating Officer, Mr Keshav R. Murugesh, in 2006 Chennai will be its main investment focus. It plans to start the construction of a Rs 100 crore campus facility at a 25-acre site at Siruseri on Old Mahabalipuram Road.

In 2005, it set up a similar facility in Pune.

In Tamil Nadu, the company plans to acquire more land in tier-II towns, particularly Coimbatore and Madurai, and also in tier-II towns in Andhra Pradesh and Maharashtra. Since the company would be seeking Special Economic Zone status for its facility, it would acquire at least 25 acres in each location.

The idea is to create land banks where there is potential for growth. The criteria would be availability of skilled manpower and infrastructure so the company will go `where talent is'. Also, the company gets the advantage of `first mover' and real estate is as good a way of investing its cash balance of about $120 million.

Though Syntel has its headquarters in Detroit, its offshore strategy revolves around India where it has the bulk of its operations. So its leadership is also shifting to India, where its board is soon expected to hold its meeting, the first in India for Syntel. Also, some of its key leaders, including him, and those of healthcare division and strategic offerings group work out of India, he said.

Its clients are from the banking and financial sector, which brings in 40 per cent of its revenue; healthcare 20 per cent; insurance 14 per cent; automotive 11 per cent; and the balance from logistics, transportation and telecom.

The company is on an expansion mode continuously. In Chennai, it has two centres with a workforce of 1,100. Pending establishment of its campus facility at Siruseri by end 2006, Syntel will set up a centre with a workforce of 500 - 600 more. The campus at Siruseri would have about 4,000 - 5,000 people working in it on its information technology and business process outsourcing businesses, Mr Murugesh said.

Syntel also has presence in Pune and Mumbai. In Pune, it just completed the first phase of a Rs 90 crore facility to seat 3,000 and when completed it will hold 8,000. In Mumbai, it has BPO facility.

The Nasdaq listed company follows a January-December financial year, and in its third quarter its revenue was Rs 263.25 crore ($58.5 million), a 25 per cent growth on its revenue of Rs 209.7 crore ($ 46.6 million) in the prior-year period. Its market capitalisation is $900 million (Rs 4,000 crore). It has set itself a target of reaching revenues of a billion dollars, market capitalisation of $5 billion by 2010, what it calls the 1-5-10 goal.

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