IDBI puts up technology arm for sale

The Industrial Development Bank of India (IDBI) has put its information technology business ""IDBI Intech "" on the block. A wholly owned subsidiary of the bank, IDBI Intech was set up in March 2000 to undertake IT related activities.

Confirming the development, IDBI sources said, "We want to exit IDBI Intech because as under the Banking Regulation Act, the bank cannot have any equity interests in un-related businesses." IDBI is being converted into a commercial bank following an amendment to IDBI Act in Parliament.

The source added that the company is working on the deal on its own and has not roped in any merchant banker. It is reliably learnt that Godrej Lawkim has shown interest in buying out company.

The authorised capital of Intech is Rs 100 crore consisting of equity share capital of Rs 75 crore and preference share capital of Rs 25 crore. The international contact centre of the company, located at Navi Mumbai.

has a facility of 116 seats but currently 48 seats are operational. Its major client is AT&T.

For the year 2002-03, Intech's revenue from sales and service and other income stood at Rs 6.13 crore as against the revenue of Rs 7.85 crore in the previous year. Its profit before tax stood at Rs 44 lakh for the year ended March 31, 2003 as against Rs 42 lakh for the year ended March 31, 2002.

The IDBI decision to get out of its software and BPO outfit kicks of the second phase of consolidation in the BPO industry where companies are getting out of non-core areas to focus on their mainline business.

The BPO industry recently witnessed mega acquisition deals with IBM acquiring the Delhi based Daksh Services.

Citigroup has consolidated its holding in e-Serve. ICICI OneSource is also looking for a private equity investor.