HCL Tech, Deutsche Bank form JV

By N. N. Sachitanand

BANGALORE, SEPT. 26. HCL Technologies, a member of the $740 million HCL Group, today announced that it had formed a joint venture with Deutsche Bank AG by acquiring 51 per cent stake in the holding company of Deutsche Software, Deutsche Bank's IT services subsidiary in India. Mr. Vineet Nayyar, Vice Chairman of HCL Tech, will serve as the Executive Chairman of Deutsche Software

HCL Technologies, based in New Delhi, is one of India's leading IT services companies, focussing on technology development, software product engineering, networking and application services. For the fiscal year ended June 30, 2001, it had gross revenues of $298 million and net income of $102 million. As of June 30 this year, the company had 3,975 billable technical professionals, of which 3,416 were based in India across 14 technology development facilities including 35 dedicated offshore development centres.

Deutsche Software, established in April 1992, has its headquarters in Bangalore where it has a 6,400 square metre Centre of Excellence. Its 450 employees are spread over Bangalore, Singapore, Frankfurt, New York and London. It has grown into a strong banking and financial sector focussed IT services company. The value of work it does in commercial terms is around $25-30 million a year.

In a brief chat with this correspondent in Bangalore, Mr. Shiv Nadar, Chairman of the HCL Group and also Chairman, President and CEO of HCL Technologies, said the new partnership would combine the technological and offshore project management strengths of HCL Tech with the domain knowledge and consultancy expertise of Deutsche Software to offer total, integrated solutions to the financial sector across the globe. He hinted that HCL Tech was likely to also pursue such acquisitions in the field of telecom, in India or elsewhere.

Mr. Martin E. Loat, CEO of the Asia Pacific Corporate and Investment Bank of Deutsche Bank, said the formation of the joint venture does reflect to some extent the trend among international banks to outsource their IT requirements and reduce their technology services costs. However, the joint venture will also enable Deutsche Software to expand its client base from only Deutsche Bank at present. Till this new client base is achieved, an income cushion has been ensured in the terms of agreement by which Deutsche Software will have a right of first refusal for seven years on business that is to be sourced by Deutsche Bank from India.

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Section  : Business
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