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Karrox Tech to spin off ITES division — Looking for foreign partners

Neha Kapoor

MUMBAI, Oct. 24

KARROX IT-enabled services (KITES), the ITES training division of Karrox Technologies Ltd, is likely to be recast as a subsidiary of the company in partnership with a foreign entity that offers ITES training or one that has a significant call centre presence in India.

Mr Darshan Shah, Chairman and Managing Director, Karrox Technologies, said, "This move is not aimed at raising more money for the company as we are already cash rich. We are exploring the possibility of spinning off KITES as a subsidiary, primarily to facilitate a partnership with a foreign company in the same space. Here again we have two options - to partner with a North American company that offers ITES training or an international company that has a large call centre presence in India."

"If the partnership falls in to place, the new entity would focus on servicing the partner company's resource requirements, apart from taking on third party work. However, at present, these plans are still on the drawing board and as such there is no set time-frame within which a final decision will be taken," Mr Shah said.

Karrox Technologies, promoted by Mr Shah, was set up in 1992 as a high-end IT training and certification company for various platforms such as Microsoft and Sun Microsystems.

Corporate groups such as Godrej and Birla have invested in the company, which has also received funding from the National Venture Fund for Software and Information Technology Industry floated by the Ministry of Information Technology and managed by SIDBI Venture Capital.

"All these investors together hold around 32 per cent in the company," Mr Shah said. KITES was set up in December 1999 to impart training in soft skills as well as domain expertise for the call centre industry, focusing on banking, financial services, insurance and telecom verticals.

The company has recently tied up with the AT&T College of Call Centre Excellence to offer programmes addressing areas such as capacity planning, forecasting call loads, resource management, recruiting and training agents.

"The division has been profitable from the first month of operations. For the last financial year, Karrox Technologies reported a turnover of Rs 18 crore with profit after tax of Rs 2.5 crore, of which 50 per cent came from KITES. Going forward, we expect KITES to contribute 30 per cent of topline and 60 per cent of bottomline," Mr Shah said.

Expanding its ITES offerings, the company will launch training programmes for back office processing aimed at financial sector by March 2003.

"These programmes will essentially be provided via the retail route using two models — through our franchisees and through tie-ups with various State Governments. The later model will use IT training centres set up by State Governments to impart these programmes to a larger cross-section of people in the semi-urban areas of the country. We will shortly be announcing a tie-up on these lines with a particular State Government," said Mr Shah.

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