Monday, January 08, 2007

Fujitsu expands in India

This is indeed heartening...Fujitsu wants to expand its operations in India

Fujitsu scouts for M&As in BPO space, eyes city co
MUMBAI: Japan's largest IT services company Fujitsu Consulting has India in its crosshair now. The company is looking at consolidating and growing its India workforce to over 4,000 people. Fujitsu has a presence in India through two companies,
Rapidigm, a 100% subsidiary, and Zensar Technologies, a joint venture company with the RPG group. Fujitsu acquired Rapidigm, a US-based BPO firm with operations in India, in February 2006. It is now looking at another BPO acquistion and is learnt to be in advanced stage of negotiations to buy out Intelenet Global Services, a Mumbai-based BPO. However, when contacted Intelenet officials denied that any talks have reached the board level. Intelenet is a joint venture between Barclays Bank of UK and HDFC. It is a 11,000-people strong operation and among the first third party BPO firms that was set up. It was started a JV between Tata Consultancy Services (TCS) and HDFC. In 2004, TCS sold out to HDFC and Barclays bought 50% stake from HDFC in the same year. HDFC and Barclays each hold 50% in the venture. Fujitsu is reported to be in talks to buy out Barclays' stake and subsequently may also acquire HDFC's stake. "Fujitsu is under pressure from investors to have an India story," a source said about Fujitsu's plans to expand in a big way in India. The company is also scouting for acquisitions in IT services because it does not have management control in Zensar. Relations between the two partners have been strained for a few years now because the RPG group is not ceding managment control of the company to Fujitsu. Despite having a 29% stake in the company, the Fujitsu business of Zensar accounts for less than 10% of its total revenues. In comparison, British Telecom accounted for 60% of Tech Mahindra's revenues in fiscal 2006, and General Electric (even after it sold its stake to General Atlantic) accounts for close to 80% of Genpact's business. "Satyam is doing more work for Fujitsu than Zensar," an industry source said. The RPG group is keen on expanding Zensar's presence in Europe, one of the fastest growing markets for Indian IT firms. Currently, around 35% of Zensar's revenues come from Europe. In fiscal 2006, Zensar had a net profit of Rs 34 crore on revenues of Rs 433 crore. For the quarter ended September 30, 2006, it posted a 200% growth in net profit to Rs 12.1 crore and a 50% growth in revenues to Rs 148.7 crore.

No comments: