India’s Tech Mahindra Ltd and Satyam Computer Services Ltd,which are in the process of a merger,aim to hire up to 10,000 staff for the combined entity in 2012/13 to meet an expected rise in demand for technology services.
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The companies also plan to complement their parent Mahindra & Mahindra group’s move to become a major defence manufacturer,Tech Mahindra CEO Vineet Nayyar said on Tuesday.
Tech Mahindra bought Satyam in a government-backed auction in 2009 after Satyam’s founder admitted to one of India’s biggest accounting frauds.
The merger,after regulatory approvals that are expected later this year,would create India’s fifth-largest software services exporter by revenue.
We are trying to secure more efficiencies internally,we’ll see how it works out,but I think it will be anywhere between 5,000 to 10,000 range,Nayyar said,referring to hiring plans for the fiscal year that began on April 1.
The two companies,whose clients include BT Group Plc and SAAB Group,together have about 75,000 employees.
Tech Mahindra hired 4,413 employees in the first nine months of 2011/12,while Satyam added 3,014 new staff in the same period.
Shares in Tech Mahindra have jumped about 24 percent in the year to date and Satyam climbed 22 percent,both outperforming the sector’s 4 percent rise and an almost flat bellwether Infosys Ltd.
In the merger,shareholders will get one share of Tech Mahindra for every 8.5 shares of Satyam,the two companies said on March 21.
The combined technology services company,which would contribute almost a fifth of the agriculture-to-aerospace group’s $14 billion annual revenue,also hopes to chip in with engineering and software designs for the conglomerate’s main automobile business and foray into defence contracts.
There’s nothing in defence,or in automobiles,which can be done without technology,Nayyar said. They (Mahindra) are great in manufacturing … we’re great in design and this gives synergies which are unique. Not many technology companies have that finesse,except possibly TCS.
TCS,or Tata Consultancy Services,is India’s biggest software services company and part of the Tata industrial group that controls Europe-based steelmaker Corus and luxury car brands Jaguar Land Rover.
Mahindra & Mahindra,India’s biggest maker of utility vehicles and tractors,is controlled by billionaire Anand Mahindra who has a penchant for acquisitions.
In the last few years,the group bought majority stakes in Korean automaker Ssangyong,electric car maker Reva,two-wheeler maker Kinetic,Punjab Tractors and Australia’s Gippsland Aeronautics.
Nayyar said the combined technology services company would look to get a foot in the door,either directly or through spin-off contracts that the group wins.