Speaking at the press conference HDFC chairman Deepak Parekh said, "A new company will be promoted by combing the strength of the both the companies purely for export which can avail of tax benefits provided by the centre.'' The company will have 1:1 debt to equity.

A part of the holding of the company will be offloaded to the employees in due course as stock options. The revenue projected for the company in the first year is Rs 50 crore which will increase to Rs 130 crore in the second year and Rs 300 crore in the third year of operations. The profit margins for these operations are above 20 per cent," Parekh added.

These services will be initially offered to overseas banks, financial institutions and insurance companies abroad. ``Our own partners Standard Life and Chase Manhattan outsource billion dollars worth of services where we can chip,'' Parekh said.

"The new company will be set up in software technology park at Vashi, Mumbai, as the government had extended tax concessions to ITES in the budget. By its third year of operations the company will employ 3000 people and after five years 7,000 people. The current global business of ITES is approximately $ 10 billion and is estimated to grow to $140 billion by 2008 and $2000 billion by 2010," Parekh said.

According to TCS chief financial officer, Vinay Aggarwal, "The important advantage of the Indian market is its cost competitiveness, high quality and English language. The current Indian share of ITES is only around $230 million which is expected to grow to $17 billion by 2010. Indian costs are roughly one-third of international costs. There is a tremendous demand for low cost, good quality work in the ITES sector."

Speaking about synergy, Parekh said that HDFC had proved that it was a good processing house. The joint venture is also effectively about processing.