Infinite Comp IPO opens on Jan 11, price band at Rs 155-165

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In an interview with CNBC-TV18, Upinder Zutshi, Managing Director of Infinite Computer Solutions, spoke about the company's functioning. 

Here is a verbatim transcript of an exclusive interview with Upinder Zutshi on CNBC-TV18. Also watch the accompanying video.

Q: What is your business model? Which are the main industries you are dependent on for your orders?

A: We are an IT services and solutions company. We have three main service lines, application management outsourcing, infrastructure management as well as research & development (R&D) and intellectual property leverage solutions. Those are the three major service lines that we offer to our clients predominantly in five major industry verticals - telecom, media, healthcare, manufacturing and energy.

Q: There are two concerned points, one is primarily your focus is on the telecom IT vertical, spending seems to be - at least that is the sense we have been getting - on a bit of a lull right now. How do you foresee order growth from the telecom space? A lot of your growth is concentrated amongst very few clients. Are you planning to diversify on that, are there any concern points there?

A: Our business strategy revolves around engaging with very large corporations global 1000-fortune 500. This is the core strategy of the company. As a result of that there are advantages and disadvantages to that strategy. The advantages are obviously when you engage with such clients, you get very large scalable business opportunity that is multi-year and significant in terms of revenue. You also get a very clear visibility and order book that creates a basic platform on which you used to grow.

On the flip side, however, is a little of a concern that there is client concentration. In our case, we look at typically top-10 clients give us 90% of the business. Each of these top 10 clients have potential to be very large clients of us. So there is no dependence of one or two single clients in our case.

In terms of our vertical, we have very significant domain as well as technology expertise in the telecom vertical. The kind of services that we provide, we do a lot of application management. Some part of application development is to a large extent discretionary. A lot of the work that we do is supporting core infrastructure, supporting applications, providing help desk support, supporting infrastructure in hardware, software networks and also having a business model that revolves around revenue share on some of the products that are installed in the telecom sector that we take on a long-term revenue share business model. In terms of our numbers we have significantly grown in the last two years. This is an opportunity at times when the market may not be doing too well.

Q: Part of your issue is a fresh offer of shares. The other part that is exactly half of it is actually a divestment by existing shareholders in the company and one of them is a company we understand called WhiteRock that is a British Virgin Island listed company. Can you tell us about WhiteRock? Why are they completely selling off from the company? When did they enter? Why are they now quitting the company entirely, if it is entirely?

A: Yes it is. They invested in us in 2003-2004. They invested USD 6 million at that time. Due to the internal considerations and the final liabilities coming to a close they would like to exit at the time of the initial public offering (IPO). It is a Singapore based fund and part of the holding is owned by Temasek. So they are completely exiting at the time of the IPO.

Q: Have they given any reason why they want to leave the company?

A: They have been invested in us for the last six years. I am sure their fund has a particular life cycle. Their IT fund is coming to a close. So they would like to exit.