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The acquisition of Electronics Data Systems Corp EDS by Hewlett Packard HP for USD 12.6 billion is likely to benefit MphasiS, in which EDS has a 60.9 per cent stake, as HP may outsource more work to the Bangalorebased company. Apprehensions, however, remain about the processes to be adopted in integrating MphasiS operations and employees with HP.HP employs 30,000 in India while the MphasiS group has around 27,000 employees.
This deal could possibly see HP coming out with an open offer for MphasiS shareholders. But we will have to wait and watch. However, we cannot deny the fact that the situation is quite positive for MphasiS, said Rishi Maheshwari, IT analyst at Centrum Broking Ltd.
Some industry watchers, however, sounded a warning bell. MphasiS is a listed entity, so it will not be easy for HP to get rid of the management. There will be a certain amount of confusion for sometime until HP comes out with a clear action plan. But in the end, it should be beneficial to MphasiS as HP could be looking at outsourcing more work to a lowcost country such as India, said an analyst with a leading brokerage house.
Anurag Purohit, IT analyst with Religare Enterprises Ltd, sounded a caveat about MphasiS getting more work from HP. When EDS took over MphasiS, there were great expectations about the number of jobs that would get outsourced to MphasiS. Whether HP will outsource a great deal of its work to MphasiS or not is yet to be seen. It actually depends a lot on the customers and the contracts. The customer may or may not want jobs to be outsourced to India. We will have to wait and watch. But in all, I don’t see any major impact on MphasiS.
On integration, industry watchers say HP needs to look at ways and means to make the transition smooth for MphasiS employees.
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