Syntel Inc to invest $20 mn for expanding in India

Syntel Inc is planning to invest $20 million in the calendar year 2005 to fuel its expansion plans in India. The $20 million investment excludes the additional funds that will be infused to build a campus facility in Chennai, for which it acquired 27.5 acres this year.

"We will spend $12 million on building the phase two of our 50-acre Pune facility and the rest will be used for expansion in other cities," said Keshav R Murugesh, COO, Syntel Inc.

In 2004, the company had invested $13 million as part of its expansion plans. At present, it has software development facilities in Chennai, Pune and Mumbai. It has also set up a 400-seater BPO facility in Mumbai recently.

Syntel Inc is also planning to add 1,500 heads soon and about 95 per cent of the new recruitments would be in its wholly-owned Indian subsidiary Syntel India Limited.

"We are ramping up our Indian operations considerably so as to align ourselves with the global offshore-onsite model, which is 80:20. At present, we have a 60:40 split, which will be at 65:35 by the year-end. Besides the cost advantage, India offers high quality engineering talent," added Murugesh.

Syntel has entered into a 51:49 joint venture (JV) with a 'Fortune 50' bank to provide it with an investment reconciliation and management services.

It will hire 2,000 personnel in the next one year for this venture alone. The bank will hold the majority stake, while Syntel will hold rest of the stake and have the management control in the new JV, which will be called 'Syntel Solutions.'

"Out of the 1,500 that we'll hire in 2005, 1,000 would be to service this JV alone, which will grow to a 2,000 strong team in the next one year," Murugesh said.

Syntel plans to foray into more such non-voice, high-value BPO activities in the insurance and healthcare space. It will also align its business vertically in the next few quarters with separate heads for each vertical.

The verticals that has its presence in are healthcare, retail, auto, banking, financial services, insurance, telecom and logistics.

Syntel, which ended with revenues of $187 million in calendar 2004, is targeting a turnover of $210 million this year.