Indian Petrochemicals Corporation Ltd (IPCL) to merge half a dozen firms

21st April 2006: The Mukesh Ambani-controlled Reliance group plans to merge a handful of its polyester fibre companies with its petrochemicals firm, IPCL. Sources close to the development said the move was aimed at integrating the operations of IPCL.

“The finished products of IPCL will be used as raw materials for these companies. The move will ensure better functioning, and, in turn, return for all related to these firms,” they said.

They added that the companies that would be brought under the fold of IPCL included India Polyfibres, Silvassa Polyfibres and Recron Synthetics. An announcement of the same was likely in beginning of next week, they pointed out.

The IPCL board will meet on April 25 to consider the unaudited financial results of the company for the fourth quarter as well as the financial year.

The Reliance group acquired IPCL four years ago through the Centre's disinvestment programme. The merger will be IPCL's first major exercise involving group companies. The Reliance group holds a 46% stake in IPCL.

It acquired Indian Polyfibres from RPG Enterprises while it bought Recron Synthetics from Raymond.

Infosys buys Citi out of Progeon for $115mn

21st April 2006: Infosys Technologies will pay Citigroup $115.13 million (Rs 518 crore) in cash to buy out its 23% stake in Progeon, the BPO subsidiary of Infosys.

Citigroup has made good returns on its investment as it had paid $20 million in 2002 to acquire the 8.75 million Progeon shares. This deal values Progeon at close to $500 million.

Infosys is paying close to six times Progeon's top line of $85.4 million for the year ended March 31, 2006. Progeon posted a net profit of $21 million, which gives it the industry's best margins of 25%. The transaction is expected to be completed by July 2006.

Infosys’ decision to buy out Citigroup from Progeon and make it a wholly owned subsidiary is part of a trend among large Indian infotech players to offer a full-range of services covering the entire information technology-BPO spectrum under their own brands.

Third-party BPO firms are becoming fewer and Indian IT firms are finding it attractive to have in-house BPO capability, which allows them to cross-sell their products. This has been very useful from the point of view of client acquisition for the BPO business.

Progeon's sales increased almost 100% to $85.4 million in 2005-06 compared with $42.9 million during 2004-05. For the fourth quarter, its top line stood at $24.4 million, up 69% compared with $14.5 million in the corresponding quarter last year.

3i Infotech acquires Datacons

17th April 2006: 3i Infotech has acquired Datacons, a Bangalore based software products company offering niche products for the mutual funds segment in the BFSI space.

According to a release issued by 3i to the BSE today, Datacons is a profitable company with annual revenues of around $5 million and 250 employees. The company is an SEI CMM Level 4 organization with a global client base and offices across the globe. It did not say how much it paid for the acquisition.

V Srinivasan, managing director and CEO, of the 3i, said, "3i Infotech is a solutions provider focused on the BFSI segment. We already have a powerful suite of offerings in the banking, insurance and capital markets space. The acquisition of Datacons will further enhance our BFSI offering and bridge the current gap in our product portfolio by addressing the needs of the mutual funds, which is a high growth segment.", the release added.