Mahindra Satyam sees biz in inorganic growth

K. V. Kurmanath Hyderabad | Updated on March 08, 2011


Mahindra Satyam, which has agreed to pay $125 million to end class action suits in the US, has now set its eyes on inorganic growth and is in the process of evaluating a few candidates for acquisitions.

The company would use part of the Rs 2,900-crore cash reserves that came along when it was bought by Mahindra group in April 2009 for the buys.

“Inorganic focus is driven both strategically and on an opportunistic basis as well. Key drivers for acquisition could be opportunities that would give us access to geographies such as Latam (Latin America),” Mr A.S. Murty, Chief Technology Officer (CTO) of Mahindra Satyam, told Business Line.

Apart from geographical expansion, the Hyderabad-based company was also looking at capabilities in areas such as Platform BPO access with a special focus on BFSI (banking, financial services and insurance) and healthcare verticals. “In all cases, we are looking for non-linear model as a key,” Mr Murty said.

He had earlier indicated that the company was also interested in buys in engineering services and infrastructure management.

While part of the cash reserves would go to payouts to the tune Rs 600 crore to clear the class action suits, the company would use some reserve funds for its acquisitions. It hoped to complete at least two acquisitions in 2011-12. “We have significant amount of cash and as and when non-organic opportunities arise we will look at that to give further impetus to the growth we are having,” Mr Vineet Nayyar, Chairman, told analysts in the earnings call after announcing the third quarter results in February.

New contract

Meanwhile, the company had announced that its Oracle Practice had signed a contract with OMRAN, the firm that was mandated by the Omani Government to deliver major projects and manage tourism assets and investments. The contract would be implemented in association with Bahwan IT, Mahindra Satyam's partner in the Gulf country to implement Oracle ERP.

“The implementation of the solution will include solutions across finance, payroll and procurement functions. This will help OMRAN standardise and automate business processes across its units,” Mr Bobby Gupta, Vice-President and Head of MENA (Middle East and North Africa) of Mahindra Satyam, said in a statement.

Published on March 07, 2011

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