Infosys sets aside Rs. 3,600cr for buyouts
Infosys executive chairman NR Narayana Murthy’s imprint is once again becoming visible at the company he co-founded in 1981 with six others.business Updated: Jun 14, 2013 00:57 IST
Infosys executive chairman NR Narayana Murthy’s imprint is once again becoming visible at the company he co-founded in 1981 with six others.
Shedding its conservative approach to takeovers, Infosys — which has fallen behind rivals TCS and Cognizant — is putting together a war chest of Rs 2,400-3,600 crore to buy out IT companies in Europe in order to add capabilities in newer businesses.
“Instead of having a vague plan to acquire firms in Europe, Murthy (earlier wary of large takeovers) insisted on setting aside funds for this purpose.
The company has decided to use 10-15% of its cash reserves (of Rs 24,000 crore) for the buyout,” said a senior Infosys executive.
Though no takeover targets have been identified, he said Murthy wants to acquire IT firms in the healthcare, automotive and defence sectors. “The contribution of these sectors to Infosys’ sales (of Rs 36,765 crore) is negligible,” he said. Infosys gets the bulk of its revenues from the banking and financial services sector in the US.
The Infosys spokesperson refused to comment on the issue.
On June 4, after taking over, Murthy appointed Infosys’ ex-finance chief V Balakrishnan as chairman of Lodestone, a Swiss consultancy firm Infosys bought in September. Balakrishnan is known to be close to Murthy.