The Hindu Business Line : Infotech Enterprises plans Rs 30-cr acquisition

Chennai, July 5 IT and geospatial services provider Infotech Enterprises Ltd will soon acquire a company in the auto industry or the hi-tech consumer medical devices business for about Rs 30 crore, according to Mr B.V.R. Mohan Reddy, Chairman and Managing Director of the company.

Speaking to Business Line on the sidelines of a two-day conference-cum-exposition on “Current Trends in achieving global competitiveness by integrated use of technology”, organised by the Confederation of Indian Industry — Southern Region, Mr Reddy declined to name the company to be acquired. However, he indicated that it was into delivering high-end services on the lines of project consulting.

Entering other verticals

The acquisition is in line with Infotech’s larger plans to enter all major industry segments in the engineering services space such as auto, hi-tech, marine and energy. It currently services the rail equipment and aerospace industry. The company has planned two other acquisitions this year to enter the auto and hi- tech segments while it plans to grow the marine and energy segments organically.

“We are looking at companies that do high-end work and are in a position to bid for complete projects, not parts of it. This will help us acquire customers faster and leverage our expertise to deliver quality projects and deals,” he said explaining the rationale behind the inorganic-organic growth strategy. For instance, it made better sense to acquire a company in the Hi-Tech consumer medical devices space, than to grow it in-house because of the global market size involved (estimated at about $18 billion (about Rs 81,000 crore), he said.

Raises funds

The company recently raised about Rs 300 crore by diluting 15 per cent stake to private equity firms Carrier International and GA Global Investment Ltd. This amount would be used to fund acquisitions in India and abroad.

To develop domain expertise in the marine and energy segments, the company has started recruiting naval architects and candidates with expertise to handle offshore units. In the energy segment, it plans to do work involving power plants such as turbine building projects, Mr Reddy said. Revenues from these new business segments are unlikely to kick in this year, Mr Reddy said without sharing the revenues expected from these businesses.

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