Infosys BPO to acquire US co McCamish for initial $38 mn

IT bellwether Infosys Technologies on Thursday said its subsidiary Infosys BPO will acquire US-based McCamish Systems for an initial payment of $38 million (about Rs 176.6 crore).

Infosys BPO has signed a definitive agreement to acquire all the outstanding interests of McCamish Systems LLC, Infosys Tech said in a filing to the Bombay Stock Exchange.

"The upfront consideration for the deal is $38 million, with up to an additional $20 million payable to the sellers if McCamish Systems achieves certain financial targets in the future," the company added.

The acquisition is expected to be completed later this year.

"We look forward to this combination with McCamish, and welcome an exceptional group of professionals with strong skill sets to the Infosys family who will enrich our service capabilities in the USA," Infosys BPO CEO & MD Amitabh Chaudhry said.

The acquisitions is expected to enhance Infosys' capability to provide complete business solutions for insurance and financial industries.

"Infosys BPO has in-depth knowledge of the insurance and financial services sector, and this deal reinforces our relationship position in providing business platform services," Chaudhry said.

The combination is likely to enable McCamish to serve larger portfolio of transactions for clients and expand into global markets.

Shares of Infosys Technologies were trading at Rs 2,336 on the BSE, up 1.18 per cent from its previous close.

infosys ahead of the world sonia gandi

Software major Infosys is a "stunning reminder" of what Indian talent, ingenuity and hard work can accomplish, UPA Chairperson Sonia Gandhi said today.

"You have shown to India and the world that an Indian company Cannot just be world class, but be ahead of the rest of the world", the Congress President said after inaugurating the company's Global Education Centre-II here.

She said the success of Infosys, India's second largest software exporter, should not be measured in Dollars alone, but in the difference it makes in transforming a society for the better.

Praising the Indian IT industry, Gandhi said the success of Infosys, Wipro, Tata Consultancy Services and other companies had changed the lives of millions of Indians and propelled the country's economy to a record-breaking growth.

Gandhi also spoke of the enabling environment created by the state government for the growth of Indian IT companies.

She recalled the "temples of modern India" established by former Prime Minister Pandit Jawaharlal Nehru and the groundwork laid down by her husband Rajiv Gandhi for the "revolution" in Communication and Information Technology.

Rajiv Gandhi faced "bitter political opposition" to his vision, not just in introduction of computers, but his greater challenge was on the "mindshift" of people in terms of accepting new ideas, she said.

Infosys Overhired

Infosys Technologies Ltd, India's second-ranked software exporter, said the business environment is challenging and clients are cautious in spending, although pressure for price cuts has eased.

The company, which employs more than 100,000 people, is not seeing any reason to accelerate hiring at this point of time due to the uncertain business environment, Chief Operating Officer Shibulal said.

" We are very honestly over-hired ," he said. "There is a very slight blip of activity, but there is nothing to tell me it (a recovery) is secular in nature."

Hopes of a pick-up in demand for outsourcing, which had been hit by the global downturn, increased after major Indian IT firms including Infosys beat street estimates in their April-June earnings and announced some large deals in the recent months.

But Infosys officials said that decision making by clients continued to be slow. "The situation is still quite challenging," S D Shibulal said. "If you look at our customers, they are not really seeing any increase on their revenue side. And because they are not seeing any increase on their revenue side, they will continue to be concerned."

The head of Nasscom, India's leading IT industry lobby, said signs of recovery in the United States were yet to translate into real business growth for outsourcing firms, though a pick-up was expected in the second half of the year.

Infosys Chief Executive S Gopalakrishnan said he expected technology spending by the company's clients to be flat in 2010 from the previous year. Ahead of the news, shares in the company valued at about $27 billion, closed up 0.9 per cent, underperforming a 1.5 per cent rise in the benchmark index. The company's shares have doubled so far in 2009, outperforming a 70 per cent rise in the broader market.

Large deals yet to come
Infosys has forecast its first annual revenue fall for the year to March 2010 on demand for fee cuts by its overseas clients. Most negotiations with clients on price cuts was over and the company was not seeing a second round of such talks, Shibulal said, but large deal flows were yet to resume.

"Overall, deals above $500 million which used to be there before the downturn, they have not reappeared in significant manner," he said. Infosys and local rivals Tata Consultancy Services and Wipro last month won IT services contracts from oil and gas major BP Plc.

Shibulal said Infosys' share of the contract was worth $116 million over five years.

Infosys Narayan Murthy sells share to set up VC Fund

Bangalore: Infosys Technologies chief mentor and chairman N.R. Narayana Murthy has sold 800,000 shares, valued at Rs.177 crore (Rs.1.77 billion/$37.9 million), from his holding in the company to fund young entrepreneurs with brilliant ideas.

"Murthy intimated to the company that the proceeds of the sale will be used as seed capital for the proposed venture capital fund to be set up in India," Infosys said in a regulatory filing to the Bombay Stock Exchange (BSE) Thursday.



The blue chip company's share of Rs.5 on par ended at Rs.2,211 on the BSE Thursday, an increase of 2.13 percent over Wednesday closing.

"The fund will primarily invest in India and may on a case-to-case basis consider investing overseas," Infosys said in the statement.

As one of the co-founders of the global software major, Murthy's holding in the company post-selling will be around 2.38 million shares.

"Murthy wants to encourage young entrepreneurs to start companies to transform India. I am sure it will inspire other industry leaders to start such funds," Infosys director T.V. Mohandas Pai told IANS.

Terming Murthy's proposal a path-breaking initiative, Pai said the venture fund would help budding entrepreneurs to set up innovative start-ups that can capitalise on the emerging opportunities.

"Murthy believe that entrepreneurship creates jobs and that is the only way to escape cycles of poverty for a country like India," Pai added.

Murthy, who is travelling in the U.S., was unavailable for comment.

infosys hikes pay

New Delhi: Infosys Technologies sprung a surprise for its employees by announcing that they may expect an increment in their salaries. The nations second largest software firm , Infosys also told its employees to expect limited promotions by October 1,2009.

Infosys initiated the salary increment strategy against all the other major firms in the IT sector like TCS, WIPRO, HCL Technologies who have stuck to the strategy of salary freezes in order to bring down the costs.

The company sent out an email statement on 18 September, 2009 to its workforce informing them about the firms decision of increasing salaries and offering need - based promotions . Infosys had so far abstained from extending any sort of salary increase to its employees . It had also skipped its promotion cycle in April as the employee utilisation rate was low. But with stabilising markets and better utilisation rates since then the firm planned to reward its employees.

The better utilisation rates were the result of the increased demand thereby also pushing up the operating margins of the company ahead of the target set of 30 percent.

On one hand Infosys has initiated the performance appraisal process for its 1,00,000 employees,on the other hand companies like Wipro , HCL are very strict on their actions of pay hikes. They have restricted the salary increments only to the best performers of the firm.