Infosys shuns Bangalore for further expansion

Infosys shuns Bangalore for further expansion
The Tribune

Bangalore, January 11
Infosys is set to make its actions speak even clearer than the words of its mentor N R Narayana Murthy. The company today disclosed that it was not adding any capacity in Bangalore as there was no further scope of expansion to its present facility in the city.

Apparently miffed at not being able to get land in the city for its expansion plans, its Managing Director Nandan M. Nilekani chose these words to describe the situation at a meeting held to disclose the third quarter results of the company. “The matter is outside our hands. We will grow where there is least resistance.”

Mr Nilekani went on to say that since there was no space in Bangalore, there was no question of adding any capacity in the city. “As many as 21,200 offers are going to be made to candidates this year. These people need to sit somewhere and there is no option but to develop centres outside the city,” he said. The company is, however, not aborting further development in Karnataka, with Mr Nilekani saying that both Mysore and the Mangalore centres of the company would be strengthened further.

Besides land, Infosys is also unhappy with the inordinate delay in developing infrastructure in Bangalore as well as the increase in travel time. Mr Nilekani said due to rapid development, conditions were also not favourable for those coming to work in the city, adding there was practicably no space for them. “In such a situation we have to look outside”.

The company also feels that most IT companies will be returning lower revenue figures in the fiscal 2007 from Bangalore because of these factors. “It will take this much time for the trickle down effect to take place”, Mr Nilekani said.

As far as the city is concerned, the company has not given up hope on the land needed by it for future development. Its Chief Financial Officer Mohan Das Pai told TNS that he would be attending a meeting of the Land Allotment Committee, scheduled to be held on February 17, to discuss the company’s proposal for allotment of 300 acres of land on the Sarjapur road. The proposal had run into a road block after former Prime Minister and Janata Dal (Secular) President, whose party is part of the coalition government in the state, had objected to it.

However, capacity addition in Bangalore has been definitely delayed as it would not be possible before one and half years even if the land demanded is allotted to it. This does not seem likely in the near future as there is no change in the political environment in the state forcing Infosys to make expansion plans in which Bangalore has no place.