Techspan to invest Rs 89 cr

Techspan Inc, a niche capital market service provider, plans to invest about Rs 89 crore ($20.2 million) in its Noida and Bangalore facilities by August 2006 .

The company will increase its headcount to 2,500 from the present 800 across its two centres. "We are scaling our operations to meet the growing offshoring orders to India from our parent company, Headstrong Corporation," said Arjun Malhotra.

India accounts for 80 per cent of the total offshoring business of Headstrong Corporation.

Headstrong Corporation is targeting a 41 per cent growth in its worldwide revenues to $120 million from $ 85 million last year.

In May 2005, 37 per cent of the company's total revenues came from offsharing. Capital market solutions accounted for about 60 per cent of the company's total operations, while the balance was shared between manufacturing, retail and public sector solutions.

Techspan, however, has no plans of entering India for the next one year. Its India centres are treated only as cost centres of Headstrong Corporation to service the western markets and do not contribute to the company's revenues.

"We will be the first to enter the market for financial services in India when it has matured but right now its way behind the western markets," Malhotra added.

The company, which continues to use its name even after the merger, has domain knowledge in financial services and, thus, is able to charge a premium of about 40 per cent from its clients.

Its Bangalore centre delivers only capital market solutions to its customers which include Morgan Stanley and Goldman Sachs.

"Nine of the ten leading investment banks in the world are our clients and this allows us to charge a premium as our competitors such as IBM, PWC have little domain knowledge," Malhotra said.

The company's Noida facilities, the second one to be ready by early next year, will have a headcount of 1,500.

To meet its growing demand for personnel, the company will recruit bulk of the people from IIT and IIM campuses.