The 50:50 joint venture, christened VAST Deutschland, has been set up at a share capital of Rs 24 lakh. The JV unit, to be located at Munich, will mainly focus on servicing IT clients in the financial, banking and e-commerce sectors. However, the entire software development activity would be outsourced to the Indian firm, which will execute the assignments on an off-shore contract basis.

Kannan Jagan, managing director, VAST, announced the formal commencement of operations of the German JV to newsmen in Chennai on Tuesday. The idea to partner with a German firm, he explained, was based on the factors of overcoming distance, language difference and the need for a local face in Germany.

Mario Raabe, chief-executive officer of the German firm, told at a tele-conference chat that his company was hopeful of earning a revenue worth Rs 3.6 crore in its first year of operations. The company, he said, has already bagged business worth Rs 30 lakh from four German customers.

On the Indian business, Jagan said that the company is planning to expand its facilities in Chennai and Bangalore.

Evading questions on the plans for an initial public offer, Jagan said that the company had to first work out some kind of a exit route to ICICI Venture which has about 34 per cent stake in the company.