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HCL Tech forms JV with Deutsche Bank

Indian software maker HCL Technologies said on Wednesday it had acquired a 51 per cent stake in a holding company which owns Deutsche Software, an Indian subsidiary of Germany's Deutsche Bank AG.

Financial details of the transaction were not revealed.

HCL Technologies said in a statement it will acquire the remaining 49 per cent over the next three years in exchange for its shares.

Bangalore-based Deutsche Software with over 450 employees develops banking applications software and executes contracts for Deutsche bank group globally.

"The joint venture provides HCL Technologies with a strong platform to strengthen its global presence in the financial services segment, one of the largest end-user markets for information technology services globally," the statement said.

Analysts echoed the optimism, saying that the alliance, which will give HCL total control over the unit in three years, will have a positive impact on the company.

"Domain expertise is of critical importance in the banking, financial services and insurance segment," said Sanjeev Goswami, software analyst at SSKI Securities, adding that it gained significance in times of vendor rationalisation.

"The company has limited presence in the financial services business area, and this acquisition will help in strengthening this presence," he said.

But its shares were sharply down amid worries the company may issue a profit warning due to the grim outlook in the United States -- an important market -- after the deadly attacks on September 11.

HCL shares tumbled 11.06 per cent to Rs 113 in afternoon trade, while the Sensex was up nearly one per cent.

In August, HCL Technologies chairman Shiv Nadar forecast net profit and revenue to grow more than 25 per cent in the current year to June 2002.

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