These are conservative estimates. Further, ICICI Infotech is likely to go for further raising of equity via a public issue, reportedly to the tune of 10 per cent of the equity. While the market valuation of the infotech subsidiary will add value straightaway to the parent company, the fact that it is holding equity in the software business will further enhance market value of ICICI.

ICICI Infotech has plans to widen its business. It acquired Rohan Software, an Indian Software development firm specialising in banking and financial services. It has also acquired Ivory Consulting in US, with annual revenue of about $10 mn. Another acquisition is ObjectXperts again in US. This is a part of the company's strategy to quickly establish its presence in major world markets.

While the above acquisitions will take care of the US, Europe and Asian markets, it has tied with the Emirates Bank group to set up a 50:50 venture under the banner of Tricolour Infotech in Dubai to tap the middle east market. To establish a presence in Singapore, it has entered into an implementation partnership agreement with Systems Access. The later is into banking products. On its own ICICI Infotech has done some pioneering work in e-commerce, m-commerce and web solutions. Some projects in European countries including Germany have been kicked off. It manpower count is 750 professionals with around 120 located in US. It is well equipped with an 85,000 square feet software development centre at Mahalaxmi in Mumbai, with another additional 90,000 square feet expected to come up shortly in Navi Mumbai and Chennai.

ICICI Infotech FY 2000 (year ending March 2000) revenues stand at Rs 41.76 cr and net profit at Rs 10.51 cr on an equity of Rs 5 cr. It has achieved growth through a sharp increase in business volumes as well as acquisitions both domestic and overseas.

ICICI has the advantage of expert domain knowledge in several areas of financial services. While it has a long standing experiece in development banking, in recent times it has successfully turned its attention to corporate financing as well.

Consumer financing too has been gathering strength, with the company being a leading player in auto financing. ICICI has been carefully and quickly crafting a strategy to tap several streams of business. To this end, it has brought about e-banking, credit card and e-broking. All these will end up giving a single window service to customers. That in turn will widen its base for deposit mobilisation, while it can continue to earn service charges.

For Q1-2001, the profit of ICICI before tax and provisions (including write-down of equity investments) was Rs 455 crore compared to Rs 404 crore in the quarter ended June 30, 1999 (Q1-2000), resulting in a growth of 13%. Notwithstanding the enhanced provisions and write-offs of Rs 142 crore in Q1-2001, compared to Rs 115 crore in Q1-2000, profit after tax in Q1-2001 increased 10% to Rs 287 crore from Rs 262 crore in Q1-2000.

The profit is after a higher provisioning of about Rs 18 crore in Q1-2000, following RBI guidelines. Also another charge has been made to the tune of Rs 8 crore as interest expenses for the redemption of a significant portion of its prefrence shares. But for these, the profit after tax would have been Rs 311 crore a jump of 19 per cent. Technically the scrip has broken through a resistance and has the potential to rise to Rs 150 levels .

K Seshadri