The Hindu Business Line : iGATE to expand in Chennai

Chennai, July 2 iGATE Corporation, which recently delisted its subsidiary from the Indian stock exchanges, has said it is expanding its delivery capability in Chennai.

In addition to the existing two facilities of over one lakh sq ft in the city, the company will add a new 1.16 lakh sq. ft facility in the Special Economic Zone at DLF Info City on the outskirts of Chennai. (The company typically uses 110 sq ft of space per seat, so a one lakh sq ft facility should house just over 900 people.)

The first phase of the new facility would become operational in the last quarter of 2008. iGATE plans to hire about 500 employees in Chennai in the next two years, which would take its Chennai headcount to over 1,200 employees.

The company is spending about $ 7.85 million in infrastructure and technology at the new, leased premises. In Bangalore, the company is adding 350,000 sq ft of space to the existing 400,000 sq ft. Its investments in that new facility would amount to $ 30 million. It is also spending $4 million in a 65,000 sq ft facility coming up at Hyderabad.

Centre of Excellence

The new Chennai facility is to house a centre of excellence targeting clients in the media and entertainment space. The team here would build frameworks and tools that would enhance productivity for clients. Its solutions here include digital rights management; content management; workflow applications; revenue management and applications for casinos’ back office operations.

Asked about the impact of the economic slowdown in the US, Mr Phaneesh Murthy, CEO, iGATE , said that clients are spending on projects that help save costs; while servicing existing end-customers is a priority, new initiatives are not seen with enthusiasm. “Spending is directed at projects that increase efficiency.”

Commenting on US elections round the corner, Mr Murthy said, “It matters little who comes to power in the US since the Indian IT industry has seen good growth through 16 years, half of which saw the Republicans in power.”

But between Mr Obama and Mr McCain, he said, “I would prefer McCain, since Obama’s policies tend towards protectionism”. He added that no government can directly impact outsourcing but tighter controls on security or data privacy fronts could impact service providers in the short-term.

iGATE registered revenues of $ 307 million in 2007 and ended the year with over 7,000 employees.

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