UST Global to invest Rs 500 cr

UST Global, a US-based IT services company, is planning to invest $100 million (around Rs 500 crore) over the next 36 months in India.

Speaking to Business Standard, Mike Zerkel, general manage UST Global, said the company would use the amount for setting up a campus at Thiruvananthapuram in Kerala. The proposed facility would accommodate 8,000 to 10,000 people. The company is looking at a hub and spoke model whereby  the Thiruvanthapuram facility would be the hub, while Chennai and Kochi facilities would be spokes.

The company has signed a letter of intent for setting up a 40,000 sft facility in Kochi and planning to employ around 800 people. In Chennai, it has a 1,000-seat capacity campus where 800 people are currently employed.

“We have set a target to invest $100 million in India over the next 36 months,” said Zerkel, adding the company was planning for an IPO in 2010 to increase its capital, which in turn would support company’s investment plan in India. The company is likely to raise money from the US market.

The proposed expansion and investment would also help the company achieve its target of $1 billion by 2012-13 and around 20,000 employees. UST Global is now a $300 million company and employs around 6,300 people.

Of the $300 million, 85 per cent of the business comes from IT services, 10 per cent from infrastructure management and five per cent from BPO operations. The company is looking at converting this to 65 per cent, 20 per cent and 15 per cent respectively over the next 3-5 years.

“We don’t break it down by revenues for India as our 50-plus clients reside in North America and Europe and thus that is where the revenue is tied to,” said Zerkel. The BPO business would continue to be dominated by India.