Cigniti Tech to raise Rs 48 crore to fuel growth plans

HYDERABAD, India - March 17, 2014 - PRLog -- Cigniti Technologies Limited (formerly Chakkilam Infotech Limited), a Hyderabad-based independent software testing company, is in the process of raising about Rs 48 crore through preferential allotment of shares to fund its organic and inorganic growth plans, said Sriram Rajaram, president (strategy and corporate development).

“We are actively looking at making an acquisition in the specialised testing space either in the UK or Australia for between $5 million and $20 million. Discussions are on and we are hopeful of sealing a deal in the next six to nine months,” he told Business Standard.

Chakkilam Infotech, had in 2011, acquired US-based Cigniti Inc in an all-stock deal. Post the merger process, it rebranded itself as Cigniti Technologies Limited. In 2013, the company acquired Gallop Solutions Inc, a US-based specialised software  testing services firm, for an undisclosed sum.

Rajaram said the company, which employed 1,000 professional globally, including 700 at its delivery centre in Hyderabad, was looking at hiring 1,400 more by March 2015, primarily for offshore presence.

“We expect to end the current financial year with revenues of Rs 280 crore (including around Rs 60 crore from Gallop), as against Rs 150 crore last year. Our target is to become a Rs 500-crore company by March 2015. Acquisitions, expansion into newer geographies and investments in creating new infrastructure and intellectual property in the areas of mobile testing, test advisory and big data testing will help in this growth,” he said.

Terming the independent testing or the specialised testing industry to be recession-proof, Rajaram said companies in this space were growing at nine to 10 per cent vis-a-vis four to five per cent growth rate that the overall IT services market was witnessing.

According to various studies, the independent software testing market globally was about $10 billion in 2010, which is expected to grow to over $50 billion by 2020. While $3.2-billion work of this had been outsourced to India, this is projected to touch $26 billion by 2020.