Dhanus Tech eyes $30 mn buys abroad

GPS products and services vendor Dhanus Technologies will invest $20-$30 million in acquisitions of alternative telecom companies in Europe and Canada.

These strategic purchases are a part of expanding the company's offerings in these markets. The acquisitions will be funded entirely through internal growth accruals, S Muthukrishnan, vice-chairman, Dhanus Technologies, said.

"We are in talks with telecom companies who have synergies with our operations and expansion plans in Europe and Canada," he said.

Fresh from its 100 per cent acquisition of Turkish alternative telecom operator Borusan Telecom, for an estimated $30-40 million this January, Dhanus is also looking at extending its telematics product Fleetrac to Europe, Canada and US, Muthukrishnan said.

"Borusan was purchased at a debt-to-equity ratio of 70:30. We now expect about 75 per cent of our revenues from the alternative telecom market to come from Turkey," he said.

Earlier, the company had announced plans to raise $200 million (around Rs 790 crore) through either external commercial borrowings (ECBs) or debt to fund its European expansion plans.

The Chennai-based company has signed a memorandum of understanding (MoU) with the Delhi Transport Corporation (DTC) to install and maintain Fleetrac tracking devices on 6,000 DTC buses.

"The scope of the project also includes DTC bus stops and shelters. We are setting up Fleetrac familiarising equipment and instructions for passengers at 600 bus stops and 60 shelters in Delhi," Muthukrishnan said.

This follows a MoU signed with the Kerala State Private Bus Operators' Federation to install satellite-based passenger information systems on all private buses in Kerala, along with consortium partners, Sobha AppliedDSP and Kiran Technologies.

Dhanus currently caters to 60 clients. It is expecting to bag orders for about 13,000 units of Fleetrac from transport bodies in Kuwait by the end of the year.

"All our equipment conforms to Controller Area Network (CAN) standards. Fleet operators and logistics companies are realising the huge reductions in operating costs which vehicle-tracking systems can give them," Muthukrishnan said.

As part of extending BPO and technical-support operations to service new contracts, a 50,000-sq ft BPO facility is being set up at Perungudi near Chennai with an investment of Rs 25-30 crore.

This facility will accommodate upto 1,000 people and is expected to be operational within 10 months, he added.

The global calling card offerings of the company under the V-Tel brand will be extended to international users later this month.

"V-Tel cards can be used in 210 countries. Last year, we sold 6.5 lakh V-Tel cards; we expect to sell 1 million this year," Muthukrishnan said. The cards are currently available in denominations of Rs 500, Rs 1,000 and Rs 1,500.

With current market capitalisation of about Rs 500 crore, and 400 employees, revenue in the quarter ended December 2007 was Rs 39.27 crore. The company posted revenues of Rs 90.37 crore last year and expects its turnover to cross Rs 200 crore by the end of 2008.