CHENNAI, Nov 7: The transnational Redington group has decided to enter the lucrative Indian software industry. The $1-billion group having its headquarters in Singapore, is aggressively scouting for a sizeable equity stake in a domestic software company.

It is now in the process of identifying suitable `medium-sized companies with a lot of talent.' The group has earmarked a sum of $3 million for this purpose.

"We are scouting for good software companies which are capital and market starved," R Srinivasan, director, Redington Private Ltd, Singapore, told The Financial Express. "Besides taking a stake, we will also be looking forward to marketing the company's software in international markets. We will be in a position to leverage our international contacts," he added.

The company has contacted a few firms and discussions are on. However, Srinivasan did not disclose the names of the companies saying it was still premature. "A final decision will be made in the next six to eight months," he said.

Redington had also considered the possibility of setting up its own software development centre in the country, but later decided that picking up a stake in a running company was a better alternative.

This decision is in line with Redington's broad investment strategy in the country. Other than its wholly-owned flagship company, Redington (India) Pvt Ltd, the group has opted for equity stakes in four other ventures in the country. The group has a 39 per cent stake in Srinivas Cellcom, which has the cellular licence for the Tamil Nadu circle (excepting Chennai). It holds a 44 per cent stake in the Mumbai-based Global Telecom Services Ltd. It also holds 49 per cent in both TNT Express and FCB-Ulka Advertising.

It is also understood that the company is actively exploring the possibility of investing in the upcoming Tamil Nadu Institute of Information Technology (Tanitec). "We will look at it as a business proposition and will invest only if we are convinced of its profitability," Srinivasan said.

The Redington group has already pumped in considerable investments into the country. "The group is trying to consolidate its Indian operations in one area (read south India), for better management from the Singapore head quarters.

Redington India handles the marketing and service operations of a range of information technology (IT) products from HP, Compaq, Samtron, Philips and Epson. During the first half of the current year, it recorded a turnover of Rs 128 crore. Srinivasan was confident of closing the current year with a sales of over Rs 250 crore, with an outside possibility of touching Rs 300 crore.

In a recent development, the group has invested an additional Rs 3 crore in Redington India's equity.

This has taken the domestic arm's capital base to Rs 15 crore. The group also lent the subsidiary $3 million through external commercial borrowing (ECB). y

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.