Nedcor has invested R70 million to acquire a majority stake in an Indian software company launched by LC Singh.
The start-up company, Nihilent Technologies, will be 79% held by Nedcor, with the Indian management retaining the remaining shares.
Nedcor plans to use software developed by the Indian company to further its Internet and e-commerce strategies. Nihilent will at a later stage set up offices in SA as well as the US, UK and Australia.
Nedcor formed a joint venture with another Indian IT company, International Computers (India), in December last year. This year it has bought into smart card company Aplitec as well as 20% of Internet service provider The Internet Solution.
Nedcor`s latest acquisition will focus on "strategic responsibility management" for mission-critical IT systems support, through to e-business solutions. Nihilent`s vision is to create a business model away from the traditional software "body shopping" model to one that offers a total solution in technology innovation, integration and operation.
Richard Laubscher, chief executive of Nedcor, says India`s dominant position in software development and LC Singh`s sterling track record make the new company an excellent investment opportunity for Nedcor in addition to the compelling strategic benefits.
Laubscher says the investment will be good for Nedcor and for SA. "India`s advanced programming skills and methodologies will be brought to our market, and the South African banking industry will keep its place among the global leaders in technology application."
"This is the single largest investment by a South African company in an Indian IT company," says LC Singh, president and chief executive of Nihilent Technologies. "Nihilent will be positioned to provide high-end transformation strategies through to design, development and application service support.
"In addition to the banking industry, we will look to form close relationships with clients in other industries, including telecoms, to deliver high-value holistic solutions using Web and other emerging technologies."
The IT industry is increasingly contributing to India`s industry growth and the software sector was worth $4 billion to the country in 1989/99.
Nedcor says it may consider listing Nihilent in the future.
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