NetSol mulls inorganic expansion

After establishing a solid domestic base in the area of remote
infra-structure management, Banga-lore based solution provider Network Solutions
is training its sights on tapping the inter-national market this year. Spelling
out the company's strategy to meet this goal, Sudhir Sarma MD, Network
Solutions said that Netsol is in the process of acquiring a "substantial
stake" in a Singa-pore based company. "Netsol had enough funds to make
this investment," he added.

Sarma revealed that the company is considering the M&A route to
increasing its presence abroad. He said, "We want to make investments in
companies in the network management services (NMS) space in the APAC region to
begin with and subsequently in the US and Europe. We will try to raise the money
required for this inorganic growth either through an IPO when the timing is
right or through VC funding." He added that he hopes to raise around $20
million to $25 million.

Netsol's revenue in 2003-04 was around Rs 179 crore with most of the sales
coming from the domestic market. Sarma hopes to close this fiscal with revenues
of Rs 195 crore.

The company has an office in Saudi Arabia and partners in Singapore, US and
Europe. Sarma expects to achieve 40 percent -50 percent revenue growth next
year. The com-pany will also ramp up its headcount from the current 1,100 to
1,500 by the year-end.

Despite competition from rival companies like Datacraft and Wipro Infotech,
Netsol has managed to hold its own in the network infrastructure space and
boasts of customers like HP, Veritas, HSBC, IDBI bank, Dell, Transworks and
Intel. Sarma attributes the com-pany's successful run to its focus on services
and develop-ing its own software tools.

Priya Padmanabhan

Bangalore