Hewlett Packard, the $38.4 billion US multinational, has decided to pull out of HCL-HP, its six-year-old infotech joint venture with Shiv Nadar-promoted HCL Corp.
Sources said HP would sell its entire 26 per cent stake to the HCL group. The deal was concluded late last week.
However, distribution of HCL-HP products as well as HPs exclusive products in the country will continue to be carried out by HCL.
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The HCL-HP scrip closed at Rs 27 on the BSE yesterday. The scrip had been hovering at its 52-week low of Rs 24 on both the BSE and the NSE during the past week against its 52-week high of Rs 91.
HCL-HP managing director Ajay Choudhury did not deny the deal and said: I have nothing to say. We are a listed company and hence we have certain responsibilities towards our shareholders. We need to get shareholders clearance before announcing anything.
The over Rs 1,800 crore HCL group holds a 50 per cent stake in HCL-HP while HP controls 26 per cent. The public and financial institutions hold the remaining 24 per cent. HCL-HP has a equity base of Rs 30 crore.
HCL had gained access to the multinationals expertise in technical and managerial aspects through its alliance with HP, forged in 1991. The move was seen as a bid to stay ahead in the fast-changing and highly competitive information technology business.
The partnership with a home-grown infotech company like HCL gave HP the much-needed advantage of a strong distribution network. But more importantly, it gave HP a partner who had an indepth knowledge of the domestic market.
The Rs 678-crore HCL-HP has customer service centres at 143 locations and state-of-the-art manufacturing facilities at Noida and Pondicherry.
While HCL-HP is responsible for the distribution of products like `Infiniti in the segment comprising top corporate houses, HCL Frontline distributes products such as `Busybee range of computers to the smaller corporates and the household segemnt of the market.