Wipro on the Prowl Again?

The rumor mill is working overtime. There’s been talk about Wipro
Technologies, India’s largest software services firm by market value, being
keen to buy a stake in Hughes Software Systems, India’s largest telecom
software company. The 55.4% stake in question belongs to Rupert Murdoch-promoted
News Corp, who had acquired it last April as part of the $3.8 bn acquisition of
parent company Hughes Corporation. Apparently Wipro is willing to shell out 30
billion rupees ($664 million) for the same.

Software analysts claim Hughes may be a good fit for Wipro, as the latter
expands its offering in the telecom and Internet working market. Hughes earned
revenues of Rs 220 crore for 2002-03, as it struggled to fight global telecom
recession over the last few years. However, the revenues in three quarters of
2003 have seen strong growth over corresponding quarters last year. The company
had also recently diversified into BPO operations, hiving-off a dedicated BPO
services division, Hughes BPO Services.

While Wipro has neither confirmed nor denied the reports, CFO Suresh Senapaty,
said talking to a business daily, "It's part of our growth strategy, we are
constantly in dialogue with companies and investment bankers to pursue
opportunities for inorganic growth." On the other side, Arun Kumar, CEO at
HSS, also denied any such deal was in the offing. According to newspaper
reports, News Corp may be looking for a strategic investor as software services
does not fit in with its media and cable business. Among possibilities is a
management buyout by the current HSS management, or a bid by Bangalore-based
Wipro Technologies. There are reports of Wipro being in the process of
conducting a due-diligence on HSS.

Rishi Seth in New Delhi