Feb 23, 2013, 04.14 PM IST | Source: CNBC-TV18

Arch rivals Infosys, TCS to work together on govt contract

It's the clash of the titans. Last year, India's top two IT companies, TCS and Infosys came face to face for a government IT contract. MCA 21, which was finally bagged by Infosys, but in a dramatic turn of events this year, all's not well with the project. It is prompting Infosys to go on the defensive side, reports CNBC-Tv18’s Kritika Saxena.

It's the clash of the titans. Last year, India's top two IT companies , TCS and Infosys came face to face for a government IT contract. MCA 21, which was finally bagged by Infosys, but in a dramatic turn of events this year, all's not well with the project. It is prompting Infosys to go on the defensive side, reports CNBC-TV18's Kritika Saxena.

Undercurrents of rivalry between Infosys and TCS have never been a big secret, but the face-off has now reached another level. It was a sixand a half year IT contract to develop and maintain MCA 21. A portal launched by the ministry of corporate affairs in 2006, which is the main platform for cos to submit documents and filings to the Registrar of Companies.

TCS was handling this contract since 2006, but the contract was given to Infosys after TCS's contract expired in December 2012. Around January, TCS completed the official handover to Infosys, but the site ran into severe technical glitches post the handover. This created a panic situation at MCA prompting the ministry to bring in TCS as an external consultant for the contract. This essentially means that TCS will have to work with Infosys in sorting out the issue.

The ministry has jumped in to ensure corporate using the portal face minimum inconvenience. Sachin Pilot, Corporate Affairs Minister said, "Issues were caused due to transition. The website is now almost back to normal. If cos loses time, no extra money will be charged."

However, Infosys has been quick to retort with a statement, rubbishing allegations of negligence at its end.

Till date Infosys has made no significant changes to the system, which continues to run in the old environment. That is managed by the incumbent vendor, Tata Communications. Infosys gave a statement that any reports that imply that the instability in the MCA 21 applications is on account of their negligence are misguided.

V Balakrishan, Head, Infosys BPO, Bangalore said,  "This is a complex project, whenever there is a transition happens one will see some challenges. I think it's a great project and we are working with the ministry closely to address all the challenges".

Even though Infosys's statement has raised eye brows, TCS however remains tight lipped. As per policy, it did not officially comment on the contract.

TCS stock price

On April 16, 2014, Tata Consultancy Services closed at Rs 2195.00, down Rs 56.55, or 2.51 percent. The 52-week high of the share was Rs 2384.20 and the 52-week low was Rs 1364.00.


The company's trailing 12-month (TTM) EPS was at Rs 85.24 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 25.75. The latest book value of the company is Rs 165.73 per share. At current value, the price-to-book value of the company is 13.24.

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