GSS America in Rs 90cr expansion mode

GSS America Infotech Limited, a Hyderabad-based enterprise application integration and infrastructure management services company, is embarking on an expansion plan which would see the company invest over Rs 90 crore.

The investment will be made to set up an additional global delivery centre (GDC) in Hyderabad and meet its working capital requirements, besides establishing offices at various strategic locations abroad.

According to Bhargav Marepally, chairman and managing director of GSS America Infotech, the company has shortlisted an IT park building at Hitec City for its offshore facility and has engaged the services of Centrix Interior Private Limited for interior designing.

"The total cost for the 1-lakh sft facility is estimated to be Rs 61 crore, while we require Rs 25 crore towards working capital. We are looking at hiring around 1,000 professionals for the facility and expect to fully occupy it by the end of this financial year," Bhargav said here on Wednesday.

GSS America currently has two global development centres in Hyderabad with a headcount of around 270. Globally, it employs over 550 professionals.

The company is also planning to set up offices in Europe, West Asia and Far East during the next two years.

"We will need around Rs 9 crore for setting up offices abroad. Initially, these facilities would look after the implementation and support functions for our products and eventually concentrate on the marketing functions of the company in their respective regions," he said.

To raise funds, the company will tap the capital market with an initial public offering (IPO) of over 3.4 million equity shares of Rs 10 each through a 100 per cent book building route.

"We have filed the draft red herring prospectus with the Securities and Exchange Board of India (Sebi) and are now awaiting the regulator's clearance to go ahead with the IPO during this financial year," Bhargav said.

Stating that the company would seek to enhance its position as a key player in the global IT solutions and services industry through the inorganic route, he said it proposed to acquire companies overseas.

"We have identified three companies abroad and are currently in the process of doing due diligence. We intend to enter into a letter of intent for the acquisition once we are through with the IPO," he added.

GSS America Infotech had acquired US-based consulting company Infospectrum Consulting Inc in April 2006 with projected revenues of $17 million for the current year through its US subsidiary GSS America Inc.