Wipro's acquisition of US firm paying off

Wipro's acquisition of American Management System's global energy practice during 2002 has started to pay off.

Shell is one of the crucial clients of Wipro and it is being serviced via the consulting expertise that came in through this acquisition.

Currently, the Shell contract brings in revenues worth $10-12 million (about Rs 4,500 crore - Rs 5,420 crore) on a quarterly basis for Wipro and this is expected to scale up rapidly.

Shell had outsourced a range of its IT requirements to IBM and Wipro in a total deal, which will run up to $3 billion (about Rs 1,35,000 crore) over a period of time, and AMS's expertise will be the lever for Wipro to get a significant part of this deal. Wipro acquired the AMS consulting capabilities in the energy practice for $26 million.

Sudip Nandy, who is responsible for shopping (acquisitions) as chief strategy officer at Wipro, said: "AMS' energy practice acquisition is a key element which will drive Wipro's growth as we scale up. In two years, Shell is expected to be the largest client for us and the consulting capability required for this scaling up is immense. This acquisition is certainly paying us off pretty well in respect to Shell as well as to scale up the energy practice."

Besides this, Wipro's acquisition of NerveWire for $18.7 million (about Rs 8,440 crore) in 2003 is also expected to play a critical role, as Wipro, along with a host of global peers, competes for the humongous $15 billion (about Rs 6,77,300 crore) deal that is brewing at the General Motor stable.

"The deal is being thrashed out and let us see how it pans out. Especially after the recent ABN Amro deal, it will be really difficult for GM to miss out on the Indian angle. We are pitching aggressively for this deal and NerveWire senior personnel are playing a key role in this deal," Nandy highlighted.

Continuing with the 'string of pearls' acquisition strategy evangelised by Vivek Paul when he was in Wipro, this diversified group is pushing ahead by acquiring niche companies. "I am among the few people in Wipro who are paid to spend the money," Nandy quipped on the acquisition plans of Wipro.