Satyam Eyes Buys, Deals In BPO Space

Hyderabad: | Updated: Jul 26 2002, 05:30am hrs
Satyam Computer Services Limited (SCSL), sitting on a pile of cash, is open to both acquisitions and strategic partnerships with potential clients to make the business process outsourcing outfit a major player in the global arena. Satyam has a huge cash reserve of Rs 1,200 crore, apart from a floating funds of over Rs 700 crore.

To facilitate this, Satyam has floated a separate company called Nipuna Services Limited to focus entirely on strategic business relations in the BPO arena. The company, a few months before, had announced a foray into BPO space.

Disclosing this to mediapersons here on Thursday, Satyam chairman Ramalinga Raju said: Satyam is not ruling out acquisitions. Satyam is looking at prospective companies which not only bring value to the new BPO outfit but also take the company to the new heights.

Satyam is also holding talks with nearly 25 customers across the globe for a possible equity participation in the BPO company. Some of our existing customers have also evinced interest in becoming strategic partners in the BPO venture, Mr Raju added.

Currently Satyam is in the process of evaluating the BPO venture and putting together the right management team so as to hit the road running from day one. Evaluation is also under way in terms of business opportunities, markets, prospective investors and other areas, Mr Raju pointed out.

On the sale of its stake in Sify, he said that although the company had received a few enquiries for a prospective buyout, the price did not match expectations.

We continue to get enquiries from both overseas and domestically. The ISP market is very challenging now. Prices in the Internet space are coming down across the globe due to the current environment. Companies that evinced in acquiring Satyams stake in Sify are now tied up with their own problems and pressures. So the price we expect has not materialised, he said adding that Satyam was committed to selling out either partially or fully.

On the Chinese foray, Mr Raju said that the company was able to enhance its client base since its foray into the country close to a year ago. Satyam has been talking to existing Chinese clients on outsourcing their services.

The company has already divested stake in its JV with GE Capital for $4 million. Satyam is awaiting approval from the Reserve Bank and the Foreign Investment Promotion Board for formal clearance, he said.

The outlook for the second quarter ending September has been fixed at Rs 475 crore to Rs 490 crore from software services and operating margin is expected to be around 31 per cent. The EPS has been projected at Rs 3.50 and Rs 3.65 for the second quarter.