IFC To Invest $1 Billion In India Over Two Years

Mumbai, Nov 14: | Updated: Nov 15 2003, 05:30am hrs
The International Finance Corporation (IFC) intends to increase its investments in the country to $1 billion over the next two years with a major thrust on the domestic technology sector. Currently, the investment wing of the World Bank has a captive portfolio of $700 million out of a cumulative investment of $1.8 billion for various sectors in India, since mid-2000 when it began its first investments in the country.

"We are bullish about India as an emerging market and we are ready to pump in $1 billion in promising areas in the next two years wherein technology will be the leader," said IFC investment officer (IT investments group) Daniel Crisafulli, adding that other areas of investment directly or indirectly will include telecom, media, infrastructure financing and microfinance.

IFC has already invested additional funds amounting to $3 million in a US-based company, Spryance, which has operations in India and deals with outsourcing services of the US Health Information Management market. According to him, IFC would like to ensure a return of 15-20 per cent from its investment in India and would also take private equity in some investment.

IFC has identified business process outsourcing (BPO), especially in medical transcription (MT), which is emerging as a profitable business, as potential exposure in India. "The MT/BPO area is slated to grow at around $10-25 billion worldwide and there is a huge potential for it in India," he stated.

IFC, which had invested around $700 million in the country, also plans to fund the media, IT and telecom sectors and small-and medium-businesses, and it is "willing for greater investment" in the country, provided it gets "quality investment proposals."

The institution has not exited from any of the companies it had invested in, he said, adding, several of these entities were nearing the initial public offer (IPO) stages.

Meanwhile Spryance Inc, which has a centre in Chennai, plans to open two more centres at Pune and Hyderabad, with an additional workforce of 1,200, said Spryance CEO and president Raj Malhotra. Spryance is also planning to invest an additional $ five million, taking its total investments in the country to $ nine million.

The BPO company has a financial backing of around $ seven million from IFC and other investors and had invested around $ four million in India in its first phase of development. It is planning to upgrade its Chennai hub and build a second facility to function as a backup unit to accommodate the increase in demand. "The opportunities in the business is at around $ 3-4 billion," Mr Malhotra said.

Spryance caters to the health information management (HIM) market, which includes MT and is growing at around 15 per cent annually. India accounts for around $80 million of the total $200 billion in the HIM market. The company, which has around 500 home-based transcriptionists will ramp up the workforce to 800 by the end of 2003 and to 2,000 in the next 18 months. u