'We are on the lookout for acquiring companies'

Having started its operations in 1993, Noida-based R Systems has come a long
way and is one of the few Indian companies which is actively looking forward to
tapping the potential in the Japanese outsourcing market. Zia Askari of
CyberMedia News spoke with R Systems International MD Lt Gen Baldev Singh about
the company's plans for the Japanese market and its upcoming IPO in India.

What advantages does the Japanese market offer as far as outsourcing is
concerned?

Japan is a huge market as far as outsourcing is concerned and not many
companies have established themselves in that region. The per capita income fora
typical Japanese is possibly among the highest in the world, so they have great
buying power. I think that we will have a great early mover advantage in trying
to initiate the outsourcing phenomenon in the Japanese region.

We are already present in China and some parts of Japan through our earlier
acquired company-EC Net and now we are looking for a bigger acquisition to
compliment our efforts and skills in geographies like Japan, America and India.

What kind of acquisition are you looking at and what are the geographies
that you are scouting for this venture?

Ideally, we are looking towards acquiring a company of the same size as
ours. So we are looking for a fairly large company in geographies like Japan,
America and India as well in order of preference.

Though we are evaluating some companies for this acquisition, because of the
complexities involved in getting a good match, this acquisition process is
likely to take at least six to nine months to complete.

Wouldn't language be a problem in working with Japanese companies?

I don't think that language will be a big problem while we outsource work
from Japanese companies. The programming languages are almost universal and
geographical language only comes into play while you do the front ending of a
product. So that would not be a major problem for us.

How are you bracing the company's operations towards a possible IPO in
the coming year?

It may be recalled that we have already done two acquisitions and entered
the areas of BFSI and SCM. We acquired Pune based Indus Software-a BFSI player
about two years ago and Singapore based EC Net-a SCM provider with development
centers in Malaysia and some presence in China and Japan.

This would be our third acquisition and would provide us the critical mass
needed to go public may be in the first quarter of 2006. In a run up towards a
possible listing of the company, we have already shifted our global headquarters
to this Noida facility, so listing the company in India will not be a big
problem.

Where do you see R Systems five years from now and what kind of
investments will you be making towards infrastructure and manpower within India?

We want to be among the top 10 IT services companies within the Indian
region, that's our long-term goal. We clocked revenues of $54 mn but then the
slowdown took its toll and our revenues dropped. However, it is interesting to
note that we are one of those few companies who have consolidated our operations
even in the bad times. This year, by December end, we are expecting to garner $
30 mn and for the next year we are aiming at achieving $ 40 mn revenue.