Security service provider SIS India today said it has entered into a joint venture with Spanish firm Prosecur with plans to jointly invest up to Rs 600 crore on building infrastructure and "strategic" acquisitions required to grow its business.
SIS will hold 51% stake in the JV; SIS Prosecur, and the balance will be with the Spanish security company. It will offer security service in cash management.
"The new company will basically invest in cash management infrastructure, cash management technology and also at some strategic acquisitions...Roughly Rs 200 crore is the initial investment into the business," SIS India Ltd Chief Executive officer Rituraj Sinha said.
He said the JV agreement has been signed by SIS' cash management division, which will now be demerged into a separate entity.
The JV partners have also agreed to invest up to Rs 400 crore for acquiring companies. So the total capital outlay for the JV is Rs 600 crore, he said.
Sinha, however, did not provide further details about the potential acquisitions and the time frame for utilising the fund.
On the ambitions of the new firm in India, Sinha said: "Overall goal is that we want 30% of the cash management services market, which is currently estimated to be around Rs 1,000 crore".
At present, the cash management business which includes security cash transport, ATM maintenance and among others, contributes around 13% to the firm's overall turnover. Last fiscal SIS earned a total revenue of Rs 1,850 crore.
According to him, the Indian cash management service market is growing at 30%, while the overall security sector is around Rs 13,000 crore, witnessing a 20% growth.
"We need to double up our footprint, world-class technology which Prosecur has that, and what we need is capital which SIS and Prosecur are jointly putting in," he said.
As part of the expansion plan, the company also looking at hiring more people. The company currently employs 52,000.
"Last year, we took in 13,000 people...We are likely to hire at the similar rate," he said. In the cash management segment, some of its clients include SBI, ICICI, PNB and Axis Bank among others.
