Syntel makes $20m plans for India

Syntel Inc has earmarked $20 million as the investment for its expansion plans in India for 2005.

The $20-million investment excludes the additional funds that will be infused to build a campus facility in Chennai during the course of this year, for which it has acquired 27.5 acres of land.

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

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

More than 95 per cent of the 1,500 increase in headcount that Syntel Inc is planning will be for 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 that 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 investment reconciliation and management services and 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 the rest of the stake and have all management control in the new JV called Syntel Solutions.

"Of the 1,500 that we shall 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 expects to foray into more such non-voice, high-value BPO activities in the insurance and healthcare space shortly.

It will also align its business vertically in the next few quarters with separate heads for each vertical. The verticals that it operates in at present are healthcare, retail, auto, banking, financial services, insurance, telecom and logistics.

Syntel which ended with revenues of $187 million in calendar 2004 is targetting $210 million as turnover this year.