India's top IT firm Tata Consultancy Services (TCS) is planning to set up an offshore development centre in South Karnataka. The company will invest nearly Rs 1,000 crore to set up the centre, which will house close to 2,000 people, sources close to the development told HT.
This would be one of the largest centres of TCS in the country, which currently employs 83,000 people across the world.
This offshore development centre would be undertaking high-margin work such as writing codes for ERP and other package implementation along with some application development and maintenance work.
"We are negotiating with the state government for close to 100 acres of land. The project would be completely functional in three years," they said. When contacted, a TCS spokesperson declined to comment.
In the first phase, TCS would invest around Rs 500 crore for the land and initial infrastructure, which will be completed in two years. "The centre is part of TCS' strategy to move to tier II cities of the country," sources said.
Industry observers feel that one of the reasons to move to tier II cities is due to lower attrition as compared to the top metros. It has centres at tier II cities including Kochi, Ahmedabad, Coimbatore and Pune.
"With a pipeline of 10 deals in the $50-100 million range, the company is ramping up capacity to meet these needs," said a Mumbai-based analyst.
During the third quarter of this fiscal, TCS net profit stood at $250 million while its revenues touched $1.1 billion as it could win large contracts and demand for outsourcing grew.