Rolta eyes buyouts in GIS segment

Rolta India, a provider and developer of IT-based GeoSpatial Information Systems (GIS) and engineering design automation (EDA) solutions, is in talks with 2-3 companies for acquisition in the GIS and engineering space.

The Mumbai-based company recently acquired Canada-based Orion, a provider of web-based GIS applications. Sitting on a cash reserve of Rs 700 crore, Rolta is looking for acquisitions in the range of $10-100 million (Rs 40-400 crore) in North America and Europe.

GIS is a collection of computer hardware, software, and geographic data to capture, manage, analyse and display all forms of geographically-referenced information. The Indian GIS market currently is around $100-150 million (around Rs 400-600 crore), but is expected to grow to $1 billion (Rs 4,100 crore) in the next 4-5 years.

In the GIS space, the company plans to create capabilities catering to verticals such as utilities, telecom, municipalities, administrative departments and the police. "We have already worked with a few companies in these verticals and the Mumbai Police for providing them mapping services. The potential in these markets is huge," says Hiranya Ashar, director-finance and chief financial officer.

Rolta entered into joint venture with France-based Thales, a leading electronics and systems group. The JV will concentrate on providing latest technology in mapping and surveillance to the Indian defence sector. It is targeting at least 20-25 per cent of the domestic defence markets IT solutions requirement.

The other acquisitions will be in the engineering design space, which is currently a $2 billion (Rs 8,200 crore) market and is being pegged to grow to $60 billion (Rs 2,46,000 crore) by 2020. According to Ashar, this will be the next big growth story for India and the company. "Currently, the industry is growing at 20-25 per cent but is poised for a much faster growth," he added.

However, unlike other IT companies, which have targetted the aerospace and product design segment, Rolta has its focus on plants and refinery design. "Almost all the major players in the power and refinery space have plans to double their capacity. Moreover, our JV with Stone & Webster gives us access to technology and expertise that these verticals," said Ashar.

Nuclear power plants is another vertical for Rolta in the engineering design space. "The Union government has the target of generating 20,000 mw of electricity from nuclear power plants and scale it up to 40,000 mw by 2030. This gives us immense potential to grow," he said. Currently, the country generates 3,900 mw of electricity through nuclear power plants.