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CMC seeks Centre nod to hike equity
TM Arun Kumar
MUMBAI, January 23: CMC Ltd, the state-owned computer maintenance and software services firm, has sought the centre's nod to increase its equity base by an additional Rs 20 crore. Of the present Rs 15 crore equity, the centre holds a majority 84 per cent while the balance 16 per cent is held by financial institutions and the public."We have forwarded a proposal to the centre to either bring in the required sum or let us go to the public, since we need the additional equity for our expansion plans," said CMC chairman and managing director Ramesh P Jhunjhunwala. Jhunjhunwala told The Financial Express that the expansion strategy, spanning the next five years, will require Rs 125 crore. "We will be able to raise about Rs 50 crore internally. However, to raise the rest, we have to increase the equity base, which will enable us in increasing our borrowing capacity," he said. The growth strategy includes setting up a base in Europe, either in the form of a 100 per cent subsidiary or a joint venture,
developing new applications using cutting-edge technology, porting existing products to newer technologies and by taking a leadership position in all its areas of operations. According to Jhunjhunwala, CMC's vision is to become a global company and provide effective services to its customers throughout the world. "For this, we need to have a base in other countries as well. We already have a subsidiary in the US, so the next logical place will be Europe, which is a potentially big market to be ignored," he said. In addition to CMC's own expansion, the company is also in the process of chalking out an expansion plan for its five-year-old US subsidiary, BRI International. "The US arm is currently working on its future strategies and we hope to decide its plans in the next few months," said Jhunjhunwala. In 1997, BRI International clocked a turnover of $ 17 million. CMC, which started its operations in October 1976 by taking over the servicing of the 800-odd IBM installations in the country, has till
date diversified from computer maintenance to areas like consultancy services, computer education, e-mail services, software development and systemsintegration. The company, which had a turnover of Rs 225 crore in 1996-97, hopes to do business worth Rs 300 crore this year.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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