Software major Infosys Technologies, on the lookout for acquisitions with a cash chest of more than $3.7 billion (Rs 16,800 crore), has an appetite to acquire companies that could go close to a billion US dollars, its CEO-designate SD Shibulal said.
"We can easily absorb acquisitions that are around 10% of our total revenue base of $6 billion, but if need be we are ready for bigger acquisitions as well," the co-founder who is due to be elevated from the chief operating officer's position," told Hindustan Times in an interview.
He said the company, which is mainly looking at building competencies through buyouts, was eyeing a deal size of between $300 million and $900 million. "As and when the opportunity (for acquisition) comes the cash available with us would come handy."
The Bangalore-based giant has so far been conservative in buyouts while its cash chest grew from about Rs 15,819 crore a year ago.
Shibulal signalled he was not unduly concerned over inflation eating into the cash and cash equivalents, mostly parked in virtually-risk free and liquid assets. "Well, the IT industry is quite volatile and we need to have large cash to hedge against this volatility."
He said an uncertain global economic environment, protectionism, regulatory hurdles and currency fluctuations contributed to volatility in the business environment.
"We need a substantial amount of cash to resist that volatility in case of any serious issues," Shibulal said, adding that cash was also being spent on building facilities to house a growing army of software engineers.
"We have already announced to hire 45,000 people. So, the amount of infrastructure that needs to be built is huge," he said. Infosys now has more than 130,000 employees.
Shibulal is the last among Infosys' founder-members to head the company.
He takes charge from S "Kris" Gopalakrishnan who is due to become executive co-chairman.