Management bandwidth a concern for acquisition: Infotech

Infotech is always looking out for a good bargain. It has articulated an acquisition strategy and has also articulated the process by which these acquisitions will be made, says Krishna Bodanapu, President & COO of Infotech Enterprises . This strategy will help in fulfilling gaps in terms of capabilities or geographic locations and given the resources at the company's disposal, the only limiting factor is the management bandwidth, he says. Infotech has not yet decide on the number of companies it plans to acquire. It is currently evaluating all group options, he adds.

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The company boasts of a bit more than Rs 600 crore of cash. It also has other assets that it can leverage upon and does not have any debt on its balance sheet. Bodanapu says the company has a lot of real estate on its books, which runs into hundreds of crore.

Below is the verbatim transcript of Krishna Bodanapu's interview on CNBC-TV18

Q: Reports indicate that the company is planning to acquire a company in the US, if you could just confirm that, is that on the companies anvil this plan to acquire a company, if yes how soon, the size of the company, have you shortlisted anything?

A: We have articulated our acquisition strategy in the past and we have also articulated the process that we are following in terms of making these acquisitions and within that context we have companies in various stages of process and we are always hopeful that something will close in the near term. It is always difficult to say when exactly something will close and even if it will close till it actually happens. We are running a pretty robust process and we are fairly confident that we will see results out of that process soon.

Q: How many companies is the company planning to acquire?

A: We don't have a number per se. We have articulated a strategy around what we want to do in terms of fulfilling our gaps in terms of capabilities or geographic locations and given the resources we have at our disposal the only limiting factor we believe is really the management bandwidth. Keeping that in mind we are evaluating a number of options at this point. We really don't have a number and we are evaluating all group options.

Q: Will you close an acquisition in FY14? Are any of your shortlisted candidates in the final stages of negotiations?

A: We do have some but unfortunately with acquisitions till it actually happens it is not prudent to say with certainty. However, we do have a fairly robust pipeline.

Q: How much of your cash would you be comfortable deploying to make an acquisition? You have close to about Rs 600 crore of cash.

A: We have little bit more than Rs 600 crore of cash. We also have other assets that we can leverage upon. We don't have any debt on our balance sheet. So, having said that the only limitation that we are looking at, at this point is our ability to acquire and assimilate a company is really the management bandwidth.

Q: Which are the other assets that you could leverage?

A: We have a lot of real estate on our books.

Q: How much would be the size of these assets?

A: It is into hundreds of crore. I don't have an exact number with me.

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