"Any acquisition we make should have a lot of synergy with what we are doing," B Ramalinga Raju, founder and chairman, told Business Standard.
So far, the Indian IT services provider has done just a couple of acquisitions - the last one being almost two years ago - while its rivals, especially Wipro, have done a series of acquisitions to gain scale.
Satyam, the fourth largest IT company in India, is also planning to ramp up its business process outsourcing (BPO) arm, Nipuna Services, which too is looking at inorganic growth.
Venkatesh Roddam, CEO, Nipuna Services, said: "We are well-positioned in the market and are quite specific about what we want to acquire. While we are looking at acquisitions, the focus is to acquire either for domain expertise or geographical reach." The company wants to strengthen its horizontal offering in segments like procurement, finance, accounting and HR.
It plans to increase its focus on verticals like the media and entertainment, energy utilities and retail. It will also increase its concentration on getting large deals while looking for inorganic and organic growth. There's a strong market buzz that it is one of the contenders for the $125 million deal from the Dutch ING group.
Nipuna currently serves verticals like telecom, manufacturing, animation, healthcare and insurance as well as banking and finance with a revenue contribution of 30, 30, 20, 15 and 5 per cent, respectively. The US contributes 80 per cent of its revenues, and Europe 20 per cent. "We are looking at the European markets as well. After the IT services the BPO segment will also be accepted in the region," adds Roddam.
The Satyam group, according to Raju, is also increasing its presence through building its global delivery centres. While it recently announced setting up its Malaysian operations with 300 people, it is also looking at expansions in other geographies.
Recently, Satyam had announced that its Global Solutions Centre (GSC) at Cyberjaya in Malaysia was fully operational - thus marking the first phase of the rollout of its Global Delivery Campus in Malaysia.
The facility is expected to become the company's largest software hub outside India. "The GSC is already staffed by 300 (mostly Malaysian) IT engineers, who support Satyam's Asean, West Asian and US customers," said Raju.
He added that the facility was expected to create more than 500 jobs for Malaysian graduates over the next 12 months, with the number increasing to 2,000 in the next few years.
"Our strategy has been to follow our customers and we will be in geographies which call for supporting our customers. Eastern Europe, the Asia-Pacific and South America are a few regions that we are looking at. Even Vietnam has good access to talent," he said.
Satyam's development and delivery centres in the United States, Canada, Britain, Hungary, Egypt, the United Arab Emirates, India, China, Malaysia, Singapore and Australia serve 570 clients, including one-third of the US Fortune 500 companies.
RAJU'S MANTRA
- Scout for synergistic acquisitions
- Has raised billing rates 3%
- Expand to other geographies
- Gradually cut exposure to the US
-
Take steps to reduce attrition
