BENGALURU: The KPIT-Birlasoft transaction created a path for smaller Indian IT companies that contain struggled to attract investment and carve niches in the increasingly competitive market.
KPIT and Birlasoft will merge to create a $700 million combined organization, which will then separated into a $500 million venture digital IT company and a $200 million auto engineering R&D company.
KPIT's Ravi Pandit said the business evaluated a number of potential partners before deciding on Birlasoft as the best fit, implying that a wider range of companies could have interest in the model.
Generally there is an improved story if you possibly can say you have specialized niche skills. A midsized player who is subscale in many offerings is a much less attractive potential customer than a smaller player with a specialization. Tactical buyers will be more enthusiastic about purchasing the specialty area without having to pay for the business enterprise they do not want. No one wants to acquire for earnings or scale any longer ,"said an expert with a Mumbai-based brokerage firm, who declined to be identified.