The Hindu Business Line : Tata arm to develop, lease out centres to TCS

Mumbai, July 1 Tata Realty & Infrastructure will spend about Rs 3,000 crore in acquiring and building properties for the country’s largest software exporter, Tata Consultancy Services, over the next 3- 4 years.

“There will not be any revenue sharing arrangement between the two Tata group companies. Properties developed by Tata Realty will be leased out to TCS,” Mr S. Mahalingam, Executive Director and Chief Financial Officer of TCS, told Business Line, shortly after the company`s annual general meeting here in Mumbai.

The company will be building infrastructure in many cities including Ahmedabad, Pune, Nagpur and Mangalore, Mr Mahalingam said.

Tata Realty and Infrastructure is a 100-per cent subsidiary of Tata Sons which serves as the group’s real estate and infrastructure development arm.

Mr Ratan Tata, Chairman of TCS, said that the company’s Chennai campus would seat up to 21,000 on completion, making it the largest campus in the country. The facility has 3,000 seats at present; it would have 6,000 more seats by end of the second phase in August, Mr Tata said.

TCS is expected to add 30,000 seats to further fuel its expansion plans in the country. It has already articulated that it will be adding capacity in other cities such as Coimbatore, Bhubaneshwar, Mumbai, Chennai, Hyderabad and Kolkata.

TCS will be investing about Rs 1,467 crore for purchasing new equipment this fiscal.

TCS continues to see significant business potential in the Indian market. It would invest about $11 million this fiscal for its global branding initiatives. “Of this, about 10 per cent will be spend on branding for our India domestic operations,” the Chief Executive Officer and Managing Director, Mr S Ramadorai said.

Responding to a shareholder’s question, Mr Tata said that a one per cent movement in the rupee impacts TCS by 35 basis points. Since April this year, the rupee has depreciated by more than 10 per cent to touch 43.47 on Tuesday.

PTI reports: A slowdown of the economy in US, the main market for Indian IT companies, would have an adverse impact on TCS, Mr Tata said.

“There will be some impact if there is a slowdown in the US. We are trying to minimise and mitigate it by adding new clients and increasing the growth of the company.”

To a query on Japanese market, Mr Tata said the company is growing its business in the Asia’s largest economy and it is headed by a Japanese national.

The company pays between 9 and 10 per cent as taxes and it would go up by 3 per cent by 2010-11 when the Software Technology Park scheme comes to an end, he said.

Having a centre in a Special Economic Zone gives the company 100 per cent tax exemption for five years, he said.

The attrition rate at TCS is 12.6 per cent, which is less than the industry’s average, Mr Tata said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Kavveri Tele's new focus

Cambridge Tech revenues rise as acquisitions help

Tata arm to develop, lease out centres to TCS

EDB to fund SPAN's centre

OnMobile buys Telisma SA

Quatrro buys 60% in Babel Media

-->