Tech Mahindra bags $20 m Indonesia project

Tech Mahindra has bagged a project for building and maintaining software for wireless network of Hutch in Indonesia for over $20 million.

"The project is very prestigious for us as we had IBM and HP as our competitors. Tech Mahindra received the order in May this year and the work will be completed by September," said Milind Kulkarni, vice-president of Tech Mahindra Ltd. We will be maintaining the software for a period of three years, Kulkarni added.

This is the first project of this size for the company especially outside UK and the US.

The company is also working for AT&T for a project on lines of British Telecom's 21st Century Network (21CN) project. The company officials refused to comment on it as the project was in its initial stages.

Tech Mahindra is a joint venture between Mahindra and Mahindra and British Telecommunications (BT). BT is spending approximately £10 billion over the next five years to build 21CN-IP-based communication and one of its major IT partner is Tech.

"About 1,000-1,200 people from Tech Mahindra are working on this project," said Rakesh Soni, chief operation officer of Tech Mahindra.

The company's offshoring has increased from in the last few months. "In the second quarter last year our offshoring was 35 per cent which has increased to 68 per cent in first quarter in 2006 and this has given a considerable boost to our profits," according to Kulkarni.

Tech Mahindra is slated to hit the capital market on August 1 and has fixed a price band of Rs 315 to Rs 365 for its initial public offer. The issue closes on August 4.

The company will be raising about Rs 400 crore in the lower band and Rs 465 crore in the upper band. The company will use the proceeds to set up additional facilities and enhance the existing faciltiy at Rajiv Gandhi Infotech Park in Hinjawadi, Pune.

"We are setting up additional facilities in Hyderabad, Kolkata and Chandigarh for which we have already acquired land at SEZs in these states," said Soni.

The company has registered a 31 per cent revenue growth as compared to its revenues the year before. The revenue for the year ended on March 31 grew to Rs 1,242.7 crore from Rs 945.6 crore for the previous year.

The profit before tax also grew by 130 per cent from Rs 102.4 crore for the year ended in March 2005 to Rs 235.4 crore for the year ended in March 2006.

Tech Mahindra has been ranked eighth in India in terms of export revenues as per Nasscom's estimates in 2005.