 "L&T Infotech plans automation, inorganic growth to drive revenue")
L&T Infotech, which has filed its draft prospectus for an initial public offering (IPO), is also investing automated service delivery for better productivity of its employees and earn better margins as it faces cost pressures in the market from larger peers.
"We are currently looking for strategic acquisition opportunities in relation to our IMS business. We are specifically looking to acquire a complementary business, technology, service or product that can provide us with access to new markets, capabilities or assets in relation thereto," the firm said in its draft red herring prospectus papers.
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Parent L&T plans to raise Rs 1500 crore to Rs 1800 crore from selling 11 per cent stake in L&T Infotech and valuing the arm at around $ 3 billion.
L&T has been planning to list the firm for over a decade now but has faced challenges in leadership and scaling business in a highly competitive market.Ahead of filing its draft IPO papers with the market regulator, in August, the company appointed former Infosys executive Sanjay Jalona as its new chief executive officer.
"Business process digitalisation is important in streamlining our cost structure to make us more operationally efficient. We plan to automate various project delivery processes as well as internal IT service processes to enhance human productivity," the firm said in its draft prospect for IPO.
Pricing issue has been affecting all software outsourcing firm due to lot of players in the space. Wipro, the third IT player in India has announced to recruit non-science graduates for services such as digital business and IT infrastructure management services (IMS) to minimise cost.
L&T Infotech said it has entered into several partnership to offer digital services to its clients and has plans to buy out firms that can enhance its market size in the IMS space.
Digital and IMS services provide end-to-end solutions to clients who need support in automation of office work flow, document digitisation, creating end-user application for mobiles, IT infrastructure consulting, design, managed services, migration services, operational support, desktop support, and Cloud enablement.
The firm, which intends to raise Rs 1500 to Rs 1800 crore from the stake sell, said it would also expand its business in Australia, Singapore, Japan, South Africa, India and the Middle East apart from traditional locations such as the US.