The Hindu Business Line : Infotech scouting for buys; tier-III cities in growth plan

Visakhapatnam, July 30 Infotech Enterprises Ltd, setting up a branch at Rushikonda here, is looking for acquisitions, as it has enough cash on hand, according to Mr B.V.R Mohan Reddy, Chairman and Managing Director.

Mr Reddy, who was here in connection with the opening of the branch of the Confederation of Indian Industry (CII), said in an interview that Infotech had started operations in the Software Technology Park of India at Kakinada and has already recruited 400 employees. “We have been allotted five more acres at Sarpavaram in Kakinada and work is going on at the project. It will go onstream sometime during 2009,” he said.

He said the company had been allotted five acres at Rushikonda and work was going on at the site. “We initially planned to begin operations during the current financial year, but it has been delayed. We may start during the first quarter of the next financial year,” he said, and added that in the first phase, 800 persons may be employed.

Excited about non-metros

He said the company was very enthusiastic about tier-two cities such as Kakinada and Visakhapatnam and talked about plans for tier-three cities as well. “We will even go to tier-three cities such Tanuku and Tadepalligudem. Attrition rate is much lower and the costs are lower. There is not much pressure on the urban infrastructure. Our experience at Kakinada has been very encouraging. If the Government develops these smaller airports, it will be much easier for software units. Air connectivity is crucial.”

Commenting on the growth of software units in Visakhapatnam he said it was fairly satisfactory, though the aspirations may be much higher. “HSBC is here, Satyam has set up shop and soon Wipro may begin operations. Others will follow,” he said.

Turnover outlook

Mr Reddy said that Infotech, which had started operations at Noida, had also acquired an old building in which operations would begin during the second quarter of 2009. “The next year will be important for us. We will begin operations here, expand our base at Kakinada and Noida. We have already got a Rs 200-crore turnover during the first quarter and expect Rs 900 crore during the current financial year. Our ambition is to become a $1-billion company by 2012,” he added.

More Stories on : Mergers & Acquisitions | Software | Andhra Pradesh

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