Wipro eyeing acquisitions in Latin America, Africa

There may not have been much action on Wipro’s ‘string of pearl’ strategy lately, but it could well be kicked off soon as the soap-to-software company eyes opportunities in Latin America and Africa. Suresh C Senapaty, chief financial officer (CFO) of Wipro, said the company was looking at the possibility of making acquisitions in these markets in the information technology space to accelerate the pace of growth.

He said Wipro was exploring both organic and inorganic routes to extend its footprint in the two markets, which were growing at much faster pace than developed markets like the US and Europe.

“There are possibilities of acquiring companies in Latin America and Africa to tap the growth opportunities there. We are looking at addressing them not just thorough organic route but also inorganically,” he said.

He said currently the company had a small presence in these markets but was looking at intensifying business activities there.
Senapaty said the company had enough cash for buying out firms in the region. Wipro currently has offices in Brazil, Argentina and Mexico in Latin America. In Africa, it is present in South Africa and Egypt.

“We would be pursing IT services opportunity in these markets. We are already there in the African market in a small way through our FMCG (fast moving consumer goods) business,” said Senapaty.

Earlier in the day speaking to the press in New Delhi, the finance head of Wipro said: “The challenge, when we go to countries in Latin America and Africa, is to convince them that our standards match that of a global company.”

Asked if an acquisition can be expected by the end of the current fiscal, he said, “Going by track record, there is not a year in which we have not done an acquisition. However, I cannot for sure say an acquisition will be done in the present fiscal.”

Sid Pai, managing director of TPI India, said Africa and Latin America were attractive not just from demand perspective but also as supply geography, where low-cost talent was easily available.

“They are catchment areas for low-cost talent and are in the same time zone as US (Latin America) and Europe (Africa). Indian IT vendors can set up offshore centres here and be as competitive as India from cost perspective,” Pai said.