NIIT denies rumours of merger with HCL

The market rumours of a merger between HCL Technologies and NIIT Technologies were denied by both the parties in separate statements to the Bombay Stock Exchange.

Meanwhile, the senior management of NIIT Technologies told Business Standard that the company was seriously exploring a local acquisition in the aviation sector and another in the US financial and transportation sectors.

Arvind Thakur, chief executive officer, NIIT Technologies, said, "The company will be eager to expand inorganically this year." The company reported 95 per cent increase in its net profit to Rs 129.2 crore for FY 2006-07.

Thakur said that growth in the domestic market would be faster in 2007. "At present, nearly 8 per cent of our revenues come from our Indian operations, and to increase this number, we will be looking at a relevant business outfit that provides services for the aviation sector," he said.

The company is already present in the manufacturing, retail and banking & financial verticals in the country. It plans to increase its India contribution to double digits with the inclusion of aviation sector, that can mean airline (transportation), loyalty solutions and cargo solutions, amongst others.

"The acquisitions will have to be focused on closing gaps in the front-end. Our acquisition strategy is driven by domain knowledge, in certain cases country-specific domain expertise within a specified vertical," Rajendra Pawar, Chairman, NIIT Technologies, said.

NIIT, the global IT solutions organisation, last acquired a controlling interest in Room Solutions, a $25 million UK-based Insurance Solutions provider headquartered in London with about 120 professionals. Thakur said, "Our acquisition this year will be of the same size and magnitude as Room, which has been a perfect fit for NIIT Technologies." The company would fund its future acquisitions through a mix of debt and internal accruals, he said.

To facilitate its penetration in the Americas, which contributes 32 per cent to the revenues today, NIIT Technologies will look at another financial services outfit. "It is a mature market and we need a company that can add clients as well as capacities to our business," added Thakur. "Europe, which contributes 50 per cent to the company's revenues, is our priority, but Asia Pacific is proving to be a much faster growing market," he asserted.