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|November 21, 1997||
Redington to enter India's software businessThe transnational Redington group has decided to enter into the lucrative Indian software industry. The $1-billion group, headquartered in Singapore, is aggressively scouting for a sizeable equity stake in a domestic software company.
It is now in the process of identifying suitable 'medium-sized companies with a lot of talent'. The group has earmarked a sum of $3 million for this.
The company has contacted a few firms and discussions are on. However, Srinivasan did not disclose the names of the companies, saying it is still premature to do so. "A final decision will be made in the next six to eight months," he said.
Redington has also considered the possibility of setting up its own software development centre in the country. But it later decided that picking up a stake in a running company is a better alternative.
This decision is in line with Redington's broad investment strategy in the country. Other than its wholly owned flagship company, Redington (India) Private Limited, the group has opted for equity stakes in four other ventures in the country.
The group has a 39 per cent stake in Srinivas Cellcom, which has the cellular licence for the Tamil Nadu circle (excepting Madras). It holds a 44 per cent stake in the Bombay-based Global Telecom Services Limited. It also holds 49 per cent in both TNT Express and FCB-Ulka Advertising.
It is understood that the company is actively exploring the possibility of investing in the upcoming Tamil Nadu Institute of Information Technology (Tanitec). "We will look at it as a business proposition and will invest only if we are convinced of its profitability," Srinivasan said.
The Redington group has already pumped in considerable investments into the country. "The group is trying to consolidate its Indian operations in one area (South India), for better management from the Singapore headquarters.
Redington India handles the marketing and service operations of a range of information technology products from HP, Compaq, Samtron, Philips and Epson. During the first half of the current year, it recorded a turnover of Rs 1.28 billion.
Srinivasan is confident of closing the current year with sales of over Rs 2.5 billion and an outside possibility of touching Rs 3 billion.
The group recently invested Rs 30 million in Redington India's equity. This has taken the domestic arm's capital base to Rs 150 million.
The group has also lent the subsidiary $3 million through external commercial borrowing.
- Compiled from the Indian media
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