Murugappa to foray into IT-enabled services

IRIS

Chennai-based Murugappa Group is about to join the race of IT-enabled
services (ITES), after a long list of majors such as GE Caps, Citigroup with its
IT-enabled services entities-Orbitech and E-Serve, Daksh and CustomerAsset,
Spectramind and eFunds.

The Murugappa Group would shortly make a foray in the ITES segment. However,
the group has set no timeframe for entry into this segment. The group is also
looking out for acquisitions, while Carborandum Universal (a group company) is
most likely to spearhead the foray into ITES. M M Venkatachalam, who was heading
the group`s human resources activities, is expected to assume the responsibility
for building the ITES business.

The Murugappa Group is fascinated by the ITES spectrum as it offers high
growth potential and would be rewarding for successful entrants. It has
strengths in engineering services, which can be leveraged and is closely
studying other companies in the market so as to get the feel of the domestic as
well as overseas market.

The group has identified insurance as another area for future growth. It has
been decided that all the investments in insurance would be made primarily
through Cholamandalam Investment and Finance Co Ltd and Tube Investments of
India Ltd.

The National Association of Software and Services Companies (Nasscom) has
forecasted India`s revenues from IT-enabled services is expected to rise by more
than 20 times to Rs 8100 crore ($16.94 billion) by 2008 from Rs 4000 crore last
year. Industry officials say Indian companies can offer services 30-40 per cent
cheaper than their competitors. According to Nasscom, top five markets for the
ITES firms are insurance, e-commerce, technology vendors, financial services and
telecommunications.

However, it seems that ITES sector has become over-crowded with the entry of
many corporates. Hence, whether Murugappa group would be successful is yet to be
seen.

Source: myiris.com