Tech Reliance - the next growth driver for Anil Ambani

Reliance-ADAG is doing what it knows best. It is making a quick entry into the software and IT services business with an impressive initial investment of Rs.8000 crores.

The venture is likely to be named ‘Tech Reliance’ and would have 6 development centres across country with aim to become among top 10 IT companies of India to join likes of TCS, Infy, Wipro, Satyam, IBM and Accenture within 2 years.

ADAG is most likely to piggyback on its existing group companies in industries such as telecom, financial services, utilities, entertainment and healthcare for initial business and bulk of it is most likely to come from Reliance Communications, which makes economic sense too as telecom services is among the top revenue earners for IT companies.

And with IT services biz expected to grow at over 25%, Tech Reliance could surely reap the benefit as Reliance companies are normally associated with ‘doing things on big scale’. And a big-ticket acquisition is certainly part of the syllabi for ADAG.

With ADAG also having its own teaching institute under Dhirubhai Ambani Institute of Information and Communication Technology, it won’t have much problem in recruiting people.

For Tech Reliance - the best case scenario shall be if it concentrates its business on domestic market initially to ward off concerns such as weak dollar, US slowdown, rising salary and attrition rates and reducing margins. Once the business picks pace, it could foray elsewhere too.

But with Reliance Communications having a huge telecom network in India and expansing itself into Gulf nations and acquiring US companies, it makes a sensible choice to start off with its own IT company.