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|January 27, 1998||
CMC seeks permission to raise equity baseCMC Limited, the state-owned computer maintenance and software services firm, has sought the government's permission to increase its equity base by an additional Rs 200 million.
Of the present Rs 150 million equity, the central government holds a majority 84 per cent. Financial institutions and the public hold the balance 16 per cent.
Jhunjhunwala estimates that the expansion strategy, spanning five years, will require Rs 1.25 billion. "We will be able to raise about Rs 500 million internally. However, to raise the rest, we have to increase the equity base, which will enable us in increasing our borrowing capacity," he said.
The growth strategy includes setting up a base in Europe, either in the form of a 100 per cent subsidiary or a joint venture, developing new applications using cutting-edge technology, porting existing products to newer technologies and by taking a leadership position in all its areas of operations.
According to Jhunjhunwala, CMC's vision is to become a global company and provide effective services to its customers throughout the world.
"For this, we need to have a base in other countries as well. We already have a subsidiary in the US, so the next logical place will be Europe, which is a potentially big market," he said.
In addition to CMC's own expansion, the company is also in the process of chalking out an expansion plan for its five-year-old US subsidiary, BRI International.
"The US arm is currently working on its strategies and we hope to decide on its plans in the next few months," said Jhunjhunwala.
In 1997, BRI International logged a turnover of $17 million. CMC, which started its operations in October 1976 by taking over the servicing of the 800-odd IBM installations in the country, has till date diversified from computer maintenance to areas like consultancy services, computer education, email services, software development and systems integration.
The company, which has a turnover of Rs 2.25 billion in 1996-97, hopes to do business worth Rs 3 billion this year.
- Compiled from the Indian media
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