TCS eyes 2 Latin America firms; plans merger of group firms

30 June 2007

Mumbai: Tata Consultancy Services Ltd., the country''s top software exporter, is close to acquiring two firms in Latin America for about Rs 200 crore, newspaper reports said, citing unnamed sources. TCS is also planning to explore the option of merging some of its group companies.

"It makes sense merging some of the group companies. However, Tata Elxsi is into animation and will be a standalone business," Tata group chairman, Ratan N Tata told the company''s second annual general meeting.

He, however, did not specify any name. IT solutions provider CMC, Elxsi and Tata Technologies are the other IT companies of the group.

The company management also announced a capex of Rs1,400 crore, up Rs235 crore from the Rs1,165 crore spent during the previous financial year. TCS managing director and chief executive officer S Ramadorai said that Rs300-350 crore would be spent on technology, while the remaining would be set aside for IT infrastructure.

"It is a matter of concern to us as to anyone who is into exports. But as offshoring is becoming a critical business strategy among the US, European and Latin American companies there will be some balancing act," Ratan Tata said.

"We are looking at expansion of our Latin America centre. But this will be through organic growth," added Ramadorai.