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Reliance, AV Birla groups to bid for CMC

The Reliance and A V Birla groups have joined the race to buy a stake in state-owned software and computer company CMC Ltd, an industry source said on Monday.

The government, which owns 80 per cent of CMC, plans to sell 57.3 per cent to a combination of an industry investor, employees and others.

"We have been qualified for the bids," said Bharat Singh, director of Birla Management Corporation, an A V Birla group think-tank. "The government has not yet invited final bids."

A spokesman for Reliance Industries Ltd, the group's flagship company, declined to comment.

Reliance and the A V Birla group will join infotech company Wipro Ltd, US computer major Hewlett-Packard and India's largest software exporter Tata Consultancy Services in the race for the CMC stake.

Analysts said the Reliance and A V Birla groups are interested in CMC as the company fits in with their expansion plans.

The Reliance group is building a 60,000 km fibre-optic network across the country, which will link 115 cities and provide a range of broadband services. The group plans to invest around Rs 250 billion in this venture.

The Reliance group includes Reliance Industries Ltd, India's largest petrochemicals maker by sales, and Reliance Petroleum Ltd, the largest private refiner by capacity.

The AV Birla group is also eyeing infotech as a major growth area.

Indian Rayon and Industries, a group firm, on June 25 announced it was acquiring France's Groupe Bull's 50.4 per cent in Bangalore-based software services company PSI Data Systems Ltd, significantly augmenting its hitherto modest presence in "new economy" sectors.

CMC reported a net profit of Rs 244.6 million in the year to March on sales of Rs 5.34 billion.

Its shares closed up 1.78 per cent on Monday on the Bombay Stock Exchange, while the benchmark index ended up 0.39 per cent.

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