Mumbai: IBM India will invest in Gurgaon-based KLG Systel, a small-cap IT company catering to the engineering and utility sector.
Kumud Goel, managing director, KLG Systel Ltd told DNA Money a formal announcement would come on Wednesday.
This would be IBM’s second investment in a small-cap in India after Daksh.
IBM is already an exclusive partner for KLG Systel, providing technology platforms for many offerings including Vidushi, a revenue management system specific to energy firms.
Big Blue also provides technology base Connectgaia, KLG’s demand-side revenue management solution to help small commercial establishments manage their electricity better.
KLG plans to consolidate its revenue management technologies for marketing by its subsidiary KLG Power in partnership with TPG Growth India, an arm of US private equity firm TPG.
“The consolidation is due to low margins (below 9%) in our engineering and procurement business. We are looking to widen our customer base in the US,” said Goel.
Rabindra Nath Nayak, research analyst at Reliance Money said, “The investment from IBM will be a very negligible one. This is basically to assure large government departments that wish to deploy such revenue management technologies that the technology is robust.”
However, Nayak feels the company’s US foray may not be productive. “The revenue management systems in the power sector make sense when the power distribution happens through multiple utility companies and users have the flexibility to switch to different providers. In the US, like India, there are only a couple of power distribution companies.”
On the other hand, a foray into Europe could deliver the goods, on account of there being multiple providers.
KLG Systel earned a net profit of Rs 77 crore in the year to March and has provided a guidance of Rs 99 crore net profit and Rs 540 crore revenue for the current fiscal. It has Rs 4,000 crore of orders in the pipeline from six state governments.
Kumud Goel, managing director, KLG Systel Ltd told DNA Money a formal announcement would come on Wednesday.
This would be IBM’s second investment in a small-cap in India after Daksh.
IBM is already an exclusive partner for KLG Systel, providing technology platforms for many offerings including Vidushi, a revenue management system specific to energy firms.
Big Blue also provides technology base Connectgaia, KLG’s demand-side revenue management solution to help small commercial establishments manage their electricity better.
KLG plans to consolidate its revenue management technologies for marketing by its subsidiary KLG Power in partnership with TPG Growth India, an arm of US private equity firm TPG.
“The consolidation is due to low margins (below 9%) in our engineering and procurement business. We are looking to widen our customer base in the US,” said Goel.
Rabindra Nath Nayak, research analyst at Reliance Money said, “The investment from IBM will be a very negligible one. This is basically to assure large government departments that wish to deploy such revenue management technologies that the technology is robust.”
However, Nayak feels the company’s US foray may not be productive. “The revenue management systems in the power sector make sense when the power distribution happens through multiple utility companies and users have the flexibility to switch to different providers. In the US, like India, there are only a couple of power distribution companies.”
On the other hand, a foray into Europe could deliver the goods, on account of there being multiple providers.
KLG Systel earned a net profit of Rs 77 crore in the year to March and has provided a guidance of Rs 99 crore net profit and Rs 540 crore revenue for the current fiscal. It has Rs 4,000 crore of orders in the pipeline from six state governments.
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