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Infosys interested in acquisitions in US and Europe

Shyam Bhatia in London

Infosys chairman N R Narayana Murthy has confirmed that his company is interested in acquiring both US and European companies, but says this will be done through stock swaps rather than cash payment.

"We have reasonable cash, but most people use stocks for company acquisitions," he told Rediff.com on Tuesday evening.

Narayana Murthy was the keynote speaker at a jointly sponsored Confederation of Indian Industry and Confederation of British Industry conference "The Indian IT Model - How Good In Today's Economic Climate?"

The conference was the centrepiece of CII's annual meeting in London that is usually timed to coincide with Wimbledon. This year the CII delegation started the ball rolling with a high-powered reception at a leading Indian restaurant off London's Gloucester Road.

The reception on Monday was followed by Tuesday's conference attended by 65 London-based companies.

Responding to a question about Infosys' longer term goals, Murthy revealed that acquisitions was one of the company's stated aims prior to its flotation on the Nasdaq.

"We wanted to look at US companies and now we are looking at US and European companies", he stated.

Earlier in his speech to a select gathering of Indian and British businessmen, including BOC chairman Sir David John and Indo-British partnership co-chairman David Jefferies, the Infosys chief said that for globalisation to succeed, a country had to bring something unique to the market place.

"Speed, imagination and excellence in execution will allow Indian companies to deliver value for money and be the darling of customers," Murthy explained, adding that Indian IT companies were expected to grow between 30 and 35 per cent annually.

He went on to list the five strengths of Indian IT companies that gave them an edge over their foreign competitors. They include the large quantity of trained manpower, value for money offered by software factories set up in India, the extended work day which allows Indian companies to start working when their US partners are fast asleep, the high quality of Indian software companies and, finally, the willingness of the Indian IT industry to adapt changing circumstances.

"The only constant for us is change," Murthy went on. "In such an environment if you want to be successful, you need to leverage the power of change. You must strategise by becoming unique in the market place in products, services and handling customers."

According to his calculation, Indian IT has a five year advantage over China, thanks to quality institutions, training methodologies, offshore factories and the widespread use of the English language.

"The Indian IT model is sound and will continue to succeed," Narayana Murthy concluded. "Our challenge in the next five years is for Indian companies to be solution players and system integration players."

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