HEADLINES
JOBS
COM:PORT
POLICY POLICE
ARCHIVES

Hofinsoft will spread equity more widely

T V Ramaswamy, joint managing director, HISL, and director, Hofinsoft, has been quoted as saying that a merger is on the cards as both the divisions are

T O D A Y

• Dodging nukes • Siemens at low-end • Seagate strategy • Hofinsoft equity

essentially providing consultancy services and there is a functional synergy.

To fund expansion, the company has planned to raise money from outside sources and is evaluating the options, including allowing equity participation in Hofinsoft from their associates as well as raising funds from the stock market. Hofincons Industrial Services has an equity base of Rs 30.1 million. At present TDICI, the 100 per cent subsidiary and the venture capital arm of ICICI Limited, has picked a stake of 24.19 per cent.

Hofinsoft has an equity base of Rs 12 million, of which TDICI holds about a third. Promoters and associates, according to Ramaswamy, closely hold the rest of the equity in both the companies.

Hofinsoft, which launched its 'lite' and enterprise versions of Computerised Maintenance and Management System recently, for materials and asset management (for the manufacturing/production sector), is looking forward to bringing out more such products that are industry-specific.

According to B Jaishankar, executive director, group business development, Hofinsoft, the company has identified the three sectors of steel, power and services that need such products as most of the ERP solutions available today do not address specific industry requirements.

For instance, products 'Impact' and 'Maveric', developed by Hofinsoft, were modified in association with UK- based consultancy, Consolidated Supply Management, which specialises in the upstream oil and gas industry.

According to Ken Kendall, general manager, operations, CSM, and a former executive with British Petroleum, CSM has successfully introduced the products in various installations across the globe, ranging from the Caspian to Latin America to Newfoundland in Canada.

'Impact' and 'Maverick', that were launched recently, are priced at a minimum Rs 400,000 and upward, according to Jaishankar.

The market size of such industry- specific and 'vertically integratable' CMMS products is estimated to be around $400 million world-wide, he added.

In about a year or two, Hofinsoft would be coming out with a suite of products addressing the needs of plant and asset managers, and the development and marketing/distribution called for more funds, according to company sources.

While Ramaswamy said that Hofinsoft would look into the possibility of CSM and their other business associates picking up a stake in Hofinsoft, Kendall said CSM does not have such plans immediately.

During 1997-98, HISL and Hofinsoft together recorded a turnover of Rs 180 million, of which Hofinsoft's share is Rs 30 million. The profit after tax is 16 per cent in the case of Hofinsoft and 13 per cent in the case of HISL.

During the current year, Hofinsoft's turnover is expected to be Rs 40-45 million, according to Ramaswamy.

He said there are no plans of any public issue at present as the market condition is not conducive but the company might go in for that option in 2000, depending on the results for 1999-2000.

He said the two companies hope to achieve a total turnover of Rs 250-300 million, with a 15-16 per cent PAT, adding this it is the minimum they are hoping to contemplate for public offering.

- Compiled from the Indian media

Tell us what you think