Compaq Financial Services Starts Indian Operations

Compaq Financial Services, a wholly owned subsidiary of Compaq Computer Corporation, has announced the launch of its Indian operations today. The subsidiary was established in 1997 to provide financing solutions to corporate customers and also to enhance Compaq's worldwide sales effort.

John Sutherland, managing director of the company's Asia-Pacific business, said: "We will be operating Compaq Financial Services in India on the same lines that we have done in other countries. Our initiatives will in no way be affected by the worldwide merger of Hewlett-Packard and Compaq since the objectives of this subsidiary are clearly spelt out."

Sutherland said the company had received clearance from the Foreign Investment Promotion Board and the Reserve Bank of India about 10 days ago. The company has also been capitalised at around $5 million (approximately Rs 24 crore).

 

Financed by Compaq Corp, the finance arm will provide IT acquisition and management solutions to Compaq's customers. The services will include asset-tracking and management, technology upgradation to guard obsolescence and disposition of equipment.

By virtue of its lease transactions, Compaq Financial will be the largest owner of Compaq equipment in the world with individual financing of Compaq's solutions being as high as $50 million in certain cases.

On catering to the retail segment, Sutherland said, "There are no immediate plans on this front and our current focus is on corporate customers only."

He added that the company would target public-sector units; government organisations; finance, telecommunications and manufacturing enterprises; and some small and medium firms.

The company's plans to cater to the leasing market in the IT sector are based on the fact that at present no strong financial player focuses on this sector. A Gartner Group Research also estimates that by 2004 about 50 per cent of all businesses will lease IT requirements.

The company is also of the view that lease transactions are 35-40 per cent larger than cash sales and it could provide customers a better return on their capital by better cash-flow management and avoidance of technology obsolescence.