Infosys, beats, TCS, bank, order

With the kind of beating the IT stocks took at the stock exchange, no body thought this day would come, at least not this soon. Infosys has bagged a key banking contract by beating TCS. The contract is for Union bank of California which is in the top 25 banks in the US. Yes, there are still banks in the US and they are still outsourcing to India.

The deal is estimated to be between $10-$15 mn. Ironically there are only two vendors in the race (Infosys and TCS) and the race was very tight. Infosys’s financial vertical Finacle is well positioned for this offer. Other interesting thing is none of the US companies like Temenos, Fiserve, Metavante which specialize in banking software were invited.

I think Barack Obama is closely watching this space. Inviting only two vendors (both Indian) for such a big contract is not the right way to run the business. I am guessing that American regulators (if there is such a thing) will be looking into this deal.

Leaving the regulatory stuff aside, this deal augurs well for the Indian IT. There is some more good news coming along for IT. Vinod Dham who is considered as the father of the Pentium chip thinks that Indian IT might gain from the economic downturn. Dham is now a venture capitalist who invests in Tech companies in their early stages.

Recent study by a consulting firm Zinnov estimates that India’s IT spend will increase between 17% to 24% by 2010. That is a significant leap for a country like India. Indian IT companies should fish for deals on the home land also.

Indian companies are playing musical chairs. HCL beats Infosys to acquire Axon. TCS beats everyone else to acquire Citigroup’s BPO. Infosys beats TCS to bag US banking order worth $15 bn. TCS was awarded a 1000 crore passport deal by the Indian government. Looks like, someone is having some serious fun.

I am hoping that Infosys stock will see significant gains today.