Feels company is cash-rich, not in need of money.
‘Market conditions are the only reason we have decided to postpone our IPO.’
T.E. Raja Simhan
Chennai, March 8 Photon Infotech, the Chennai-based IT company with centres in the US, has reduced the number of employees by nearly 350 in the last three quarters. It has also postponed its IPO (initial public offer) on the back of market weakness and the global stock market meltdown, according to its Chief Executive Officer, Mr Srinivas Balasubramanian.
The company currently has around 1,300 full-time staff and also a few trainees, temporary staff and the business associates who work as independent consultants, he told Business Line.
“We have seen managed and unmanaged attrition along with a section of our staff taking up sabbatical and opting for part-time employment. The managed attrition has been a continuous process that we follow (there are multiple appraisal cycles in a year), and typically this is the bottom 10 per cent every year. There have not been any severe spikes that we have seen. We have also been opting for more temporary hires from other companies rather than full-time hires as we watch the economic uncertainty,” he said.
No need for money
Mr Balasubramanian said the company is cash-rich and there is no urgent need to raise money from the markets. “We intend to do so when the valuations for India, in general, and the IT sector, in particular, become more rational. Market conditions are the only reason we have decided to postpone our IPO,” he said declining to give financial details of the company.
Photon provides solutions in the “second generation Internet technology (Web 2.0), service-oriented architecture and search engine optimisation space”. It was engaged with nearly 150 new customers last year, in addition to its existing customer base.
“In general, new IT projects are being delayed by US customers (where we derive the bulk of our revenue), but this is no different from the impact that the rest of the market is facing on the back of the slowdown in the US economy,” he said.
The company recently commenced operations at two new facilities — one in L&T Estancia SEZ and one at Adarsh SEZ in Bangalore — while it continues to operate from its headquarters in Karapakkam, Chennai.
“We expect revenue and manpower to increase by 10-20 per cent in the coming year and our profits to grow by 35-40 per cent on the back of efficiency gains and favourable exchange rate moves” he said, without specifying numbers.