MUMBAI, January 28: GE Capital Services-India has shelved its plans to set up two subsidiaries in the country. The company already has the government's approval to set up two subsidiaries for its hire-purchase and financial-billing services business.Instead, the company has decided to set up a computer software centre under the government's STP (special trade promotion) scheme at Noida. The initial equity investment planned for the centre is Rs 8 crore spread over a period of five years. The Foreign Investment Promotion Board (FIPB) cleared the application after getting a no-objection note from the directorate of STP.GE Capital Services had initially planned two subsidiaries with an equity investment of Rs 360 lakh. It had then got the FIPB's approval in mid-1997. However, FIPB had noted that the two subsidiaries would fall under the NBFC (non-banking financial services companies) guidelines and so GE Capital Services would have to download 25 per cent of the equity to resident Indians.
According tosources, the change of plans clearly indicates the company's preference for the acquisition route to enter the non-banking finance activities. The company has recently acquired SRF Finance and is reportedly planning to take over the Ahmedabad-based Anagram Finance.
As for the proposed computer centre at Noida, industry observers feel that the centre falls under GE's equipment management services division which offers computer services as one of its nine activities. Worldwide, this business is manifested through GE's Technology Management Services concept and provides full-life cycle services to help customers control and manage their technology investments more cost effectively. Through this service, GE Capital Services also offers integrated technology management solutions in information technology, and test and measurement equipment.
GE's strategic focus with this service is in providing desktop services, network integration and enterprise-wide outsourcing on a global basis. In fact, the company has awholly-owned subsidiary in the country called GE Capital International Services which was set up in October 1996 and offers services in handling processes which are manual intensive. It also focuses on business process management by offering competitively priced "outsourcing" opportunities. It is, however, not clear whether the proposed centre would be placed under this subsidiary.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
