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February 13, 2017

Infosys: On a downward spiral - Financial Chronicle

A Financial Chronicle quotes Venture Intelligence data on acquisitions and investments by Infosys:


The article also quotes Arun Natarajan, Founder of Venture Intelligence:
Infosys has never been prolific on acquisitions. In all, it had nine acquisitions and sale activities, and it seemed to have relied more organic growth largely.
“While it is true that, with the exception of Lodestone Holdings (in 2012), the "founder era" at Infosys (until mid-2014) did not see any "big bang" acquisitions (costing $200m or above), the Indian IT services industry was largely focussed on making "tuck in" acquisitions until then,” says Arun Natarajan, founder and managing director, Venture Intelligence, a firm that tracks mergers & acquisitions across sectors. 
For example, until the $2.7 billion Trizetto acquisition in September 2014, Cognizant's largest reported acquisition was a $135 million buy (marketRx in October 2007). Also, Wipro, with the exception of the $600 million Infocrossing deal in 2007, did not make any acquisition crossing $200 million until 2016. “Clearly, while Wipro and Cognizant have done more acquisitions overall (both of which have done 20+ acquisitions compared to Infosys' nine), the industry overall had stayed away from any "bet the company" acquisitions until 2014,” Natarajan explained.
“Minority investments in start-ups (including by Infosys and Wipro), might lead to potential acquisitions down the line, but is not something that seems oriented towards growth in the short term-- especially since it takes a lot to "move the needle" for such large companies. They are more a way to get an inside track of technologies and innovation (including especially in the US) that will affect their own industry as well as those of customers in the medium to long-term,” Natarajan pointed out.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.