TMT to demerge IT, ITeS services in to separate company

27 April 2006

Hinduja TMT Ltd will demerge its IT / ITeS undertaking into a new company, while simultaneously merging its media and content subsidiary InNetwork Entertainment Ltd into the residual entity.

Both the companies would be listed on the Bombay Stock Exchange and National Stock Exchange and the current shareholders would be allotted shares of both the companies in proportion to the capital employed in the respective businesses. The appointed date of the demerger would be April 01, 2006.

Hinduja TMT would continue to be the holding company of Indusind Media and Communications Ltd (IMCL), which operates intra-city fibre networks, with 6,000km of trunk and access HEC networks and an over 40 per cent market share.

Ashok P Hinduja, chairman, Hinduja TMT, said, "The demerger and related restructuring will unlock immense shareholder value. While the current market cap is about Rs2,220 crore, the sum of parts valuation is significantly higher, which could get unlocked. It will also go a long way in speeding up inorganic growth opportunities in both the technology and media / telecom companies, apart from aiding the induction of strategic and / or financial partners. Operational efficiencies in both the resultant companies would also increase".

The company''s technology business employs over 7,000 people of whom over 3,000 are overseas employees, and employs a global delivery model with presence in five countries and significant revenues generated overseas. With certifications like SEI CMM Level 4, ISO 9001:2000 and BS 7799, it is ranked among the top 15 BPO companies in India by NASSCOM.

Hinduja TMT was ranked eight among the ''top 10 call centres worldwide'' by Global Services magazine, in a survey conducted along with NeoIT in January this year and among the 200 "Best under $ 1 billion company in Asia" by Forbes in October 2005. The company has domain expertise in healthcare and insurance, financial services, manufacturing, telecom, pharmaceuticals, consumer electronics, household products, energy and utilities.