Zylog plans Rs 500 cr infra spend, eyes Singapore firm

Chennai-based Zylog Systems is planning to invest around Rs 400-500 crore to create infrastructures which would support its plan to bag government projects. The company is also in the final stage of acquiring a company in Singapore, which offers solutions for various e-governance and public utility services. Besides the company is also starting a pilot to give internet through towers.

Speaking to Business Standard Sudarshan Venkatram, chairman and executive officer, Zylog Systems said that main focus for the company is going to be government projects. Recently the company bagged orders from Karnataka and Gujarat transport corporations to issue smart cards for the drivers it includes license and RC book.

The two projects would bring revenue to the tune of over Rs 200 crore, said S P Srihari, head – India operations, Zylog Systems.

He added one of the strategies to increase company’s business in India is to focus on centre and state governments projects.

During the current fiscal the company is eyeing Rs 1,000 crore of total business, as compared to Rs 737 crore, of which only five per cent of the revenue would come from government projects. But in the next three years 50 per cent of company’s revenue would come from government projects, said Srihari.

Venkatram noted, over the next five years various government agencies smart card projects alone can bring business to the tune of around Rs 10,000 crore to IT companies in the country.

The company is currently in the process of bidding for various e-governance and other IT upgradation projects which are taken up by municipal corporations, civil aviation, agriculture department, primary health care and other government agencies.

“We will bid for these projects along with public sector undertakings”, said Venkatram.

Srihari said, it is essential to set up infrastructure. The company would invest around Rs 400-500 crore for the same, he added.

Venkatram added, the company is in the final stage of negotiation to acquire a Singapore-based company and a US-based company. The deals are expected to go upto $50 million.

The Singapore company offers solutions for e-governance projects, which are gaining momentum in India. The same solution can be offered in India, with a little bit of customisation, said Venkatram. The company is also planning to take up the solution to African countries like Ghana and South Africa.

Commenting on the acquisition in US, he said that, it is primarily to get access to foray into US market.

Both the acquisitions are expected to be completed by end of the current calendar year. It may be noted, recently the company has acquired a Dubai-based company which offers solution for e-government and mobile application for public utilities and last year it acquired a UK-based company.

Meanwhile Zylog Systems which recently launched wireless internet service as pilot in Chennai through its subsidiary company Zylog Systems India Limited, is now planning to start one more pilot through which it is going to try out giving internet through towers, said Venkatram.

The company has collaborated with a Singapore company to start the pilot near Puducherry.