IDBI Intech, the information technology arm of IDBI Bank, is reworking its business model to increase product development and expand its services business in the financial sector. This would reduce the dependence on business accruing from acting as a direct sales agent for parent IDBI Bank and other financial sector players.
To hasten the pace of business expansion, especially in products, the company is looking at growing through the inorganic route. Speaking to Business Standard, managing director and chief executive Sanjay Sharma said, “We are looking for companies that have created niche products in the banking and finance space, but find it tough to sell.”
If an acquisition does take place, the deal would be funded largely through internal accruals. “We will raise money only if we have to,” Sharma said. As on March 31, 2011, IDBI Intech’s capital base stood at Rs 13.12 crore and reserves at about Rs 9.38 crore. The company recorded a turnover of Rs 144 crore and reported a net profit of Rs 4.5 crore for 2010-11. It expects to report a turnover of Rs 180 crore by the end of March 2012.
On the direct sales agent business, Sharma said the company was managing a workforce of about 9,000 people. It plans to increase the share of non- direct sales agent business (product and services like information technology consulting) to more than 50 per cent in the next three-five years. The company’s turnover is estimated to grow to Rs 500 crore in five years.
IDBI Intech also plans to start a portal for education loans. This would act as an interface between students, banks and educational institutions. Sharma said the company would get a transaction fee from the bank concerned, once a loan was disbursed. Later, the portal would also monitor the repayments of these loans.
The company is partnering business analytics software and services firm SAS to offer data mining and business analytics solutions to the banking sector. It has also developed an automated data flow software product, which would be launched by December.