RealTime IT News

Nedcor Invests $10 Million in Indian IT Start-Up

[Johannesburg, SOUTH AFRICA] Convergent banking and IT group Nedcor announced on Monday that it has taken a 74.9% stake in Indian IT firm, Nihilent Technologies in exchange for a $10 million (R70 million) investment. The Mumbai-based start-up was established by Indian IT 'personality' LC Singh, focusing on e-business software development and IT consultancy.

The company will remain based in India, in order to capitalize on the skilled and inexpensive programming workforce of the region, but plans to extend operations to South Africa, Australia, the U.K. and the U.S.

Singh, who called this deal the "single largest investment by a South African company in an Indian IT company", has had a five year working relationship with the banking group which laid the foundation for this deal. He revealed that the company will provide e-commerce solutions to all industries, not merely the banking sector, and might pursue a listing at a later stage.

Nedcor CE Richard Laubscher believes that this investment is a well-placed strategic move considering India's dominance in software development and Singh's status in the Indian IT community, virtually guaranteeing a positive market reception for the new company. Laubscher revealed that Nihilent's technologies will be immediately harnessed for the expansion of Nedcor's e-commerce and internet strategies.

The transaction is still subject to regulatory approval, but Nedcor revealed last week that the company will be pursuing a series of IT investments in the coming months. The company will further elaborate on their IT strategy at a media presentation at the end of this month. Executive Director Tony Routledge did reveal, however, that further Nedcor investments in South African IT companies are likely to be announced before the end of the month.