NetSol to raise funds for inorganic expansion

After establishing a solid domestic base in the area of remote infrastructure
management, Bangalore-based solution provider, Network Solutions (NetSol) is
training its sights on tapping the international market this year. Spelling out
his strategy to meet this goal, the company's MD, Sudhir Sarma said that
NetSol was in the process of acquiring a substantial stake in a Singapore based
company. Netsol had enough funds to make this investment, he said.

He revealed that he is considering the M&A route to increasing presence
abroad. "We want to make investments in companies in the network management
services (NMS) space in the APAC region to begin with and subsequently in the US
and Europe. We will try to raise the money required for this inorganic growth
either through an IPO when the timing is right or through VC funding." He
added that he hoped to raise around $20 to $25 million.

Netsol's revenues in 2003-04 was around Rs 179 crore with most of the sales
coming from the domestic market. Sudhir hopes to close this fiscal with revenues
of Rs 195 crore. "While last year, we invested in putting in place a global
management center and developing IT infrastructure tools, in 2005, we have plans
of expanding our presence abroad in a big way."

The company has an office in Saudi Arabia and partners in Singapore, US and
Europe. Sudhir expects to achieve 40%-50% revenue growth next year. The company
will also ramp up its head count from its current 1100 to 1500 by the year-end.

Despite fierce competition from rival companies like Datacraft and Wipro
Infotech, Netsol has managed to hold its own in the network infrastructure space
and boasts of customers like HP, Veritas, HSBC, IDBI bank, Dell, Transworks and
Intel. Sudhir attributes the company's successful run to its focus on services
and developing its own software tools.

PRIYA PADMANABHAN

(CyberMedia News)