The Hindu Business Line : Satyam adds 35 clients, sets up M&A team

SATYAM Computer Services Ltd has inducted about 950 people during the third quarter, thereby taking its headcount to 23,432, while simultaneously adding 35 clients, the highest addition in a quarter.

Along with its subsidiaries, including Nipuna, it will have 26,000 associates by this fiscal end.

Given the current business pattern, the company has scaled up its overall recruitment numbers from 5,500 it had indicated earlier this year to 6,000. However, it is witness to 18 per cent attrition rate.

The new client additions include six Fortune Global 500 and US 500 companies and the strategy to broadbase growth has resulted in increased number of customers with annual revenue run rate of more than $1 million, $5 million and $10 million. Satyam's customer base of Fortune Global 500 and Fortune US 500 corporations has gone up to 155.

The President of Satyam, Mr Ram Mynampati, said about 55 per cent of the work was on-site and 45 per cent offshore.

The Chief Financial Officer, Mr V. Srinivas, said CitiSoft and Knowledge Dynamics, which Satyam acquired for strategic reasons of adding new capabilities in areas where they did not have presence, continued to make losses. However, they had helped the company enter new areas of operations.

Cash comfort: "It is a nice feeling to be sitting on a cash pile of Rs 2,900 crore (about $ 600 million), that could be potentially used in merger and acquisition (M&A) activity. If we are able to choose a potential buy, we would not hesitate to deploy these funds," Mr Srinivas said.

"The company has set up a separate M&A team of about 10 people who are constantly evaluating opportunities. We are particularly interested in consulting space in the US and Europe, who could provide value addition. M&A is not easy and takes lot of effort for integration. There is no point in acquiring a tier-II company, since we are adding about 6,000 people a year, which is more than the size of such companies," Mr Srinivas explained.