Mr. Jasjit Sawhney, Founder, Chairman & MD, Net4 India Limited

Speaking with Yash Ved of IIFL, Mr. Sawhney says, "Over the next 3 years, we shall be investing in additional Data centre capacity, adding VPN services to our portfolio and growing our Points of Presence".

July 19, 2010 10:42 IST | India Infoline News Service

Mr. Jasjit Sawhney, Founder, Chairman & MD, Net4 India Limited, graduated in Law from University of London and simultaneously studied Development Economics of India. He started his professional career as a trader at London's foreign exchange bourses. His interest in Internet sector urged him to join a startup ISP in London, UK- ONet Ltd. The startup that quickly grew to become a premier London- Internet service provider. His quick learning attributes led to a thorough understanding of the business, especially in customer services and operations and he ended his stint as Director Operations. Jasjit is a key member of the CII National Committee on Telecommunications and on the board of NIXi a Ministry of IT, Govt. of India, funded company.

Net4 India Ltd. is India’s leading Network and Application Services Provider. The company focuses on providing services to businesses (small, medium and large) and its offerings include Enterprise Internet Services, Data Centre Solutions, VoIP Solutions, and Enterprise Messaging & Hosting Solutions. Headquartered in Noida, Net4 has a PAN India presence with offices in 11 major business cities & an ever-growing clientele which includes 800 Corporate Data Center Customers, 2800 Business VoIP customers, 75,000 hosted websites, 870,000 corporate e-mail accounts & 250,000 registered domain names. Net4 is amongst the largest provider of hosted email, web hosting and domain name registration in the Asia-Pacific region.

Speaking with Yash Ved of IIFL, Mr. Sawhney says, "Over the next 3 years, we shall be investing in additional Data centre capacity, adding VPN services to our portfolio and growing our Points of Presence".

How do you see the outlook for IT industry in FY11?
The overall domestic IT industry, a part of which we serve, is witnessing strong growth, especially so in the Medium Enterprise space. Companies in this segment are looking at a phase wise approach of adopting business efficiency applications and here SaaS services will have a key role to play, because of the inherent low barrier to trial/use. Networking and IT hardware will continue to grow steadily and the Government will be a key consumer.

Brief us about your capex plans?
We have a regular capex of about Rs60mn a year. Further over the next 3 years, we shall be investing in additional Data Centre capacity, adding VPN services to our portfolio and growing our Points of Presence. This would entail a fully loaded capex of Rs700mn over a 3 year period. Last year, we had capex of Rs110mn.

What are your expansion plans?
We are currently focused on serving the Indian business customers. Hence, almost all our expansion plans are India centric. The company has decided to expand its product line in the hosted applications space by introducing applications for schools, travel industry and other automated applications. The combined platform of the above services will enable Net4 to launch cloud services. The company is well positioned to capitalize on the demand for data centre services and expand its offerings.

The expansion will be funded by a combination of equity sales, internal accruals and bank borrowings.

Tell us about your International operations?
Our web services and hosted applications business has been gaining some traction with International customers of late and they are being served out of the infrastructure in India.

We are expanding in select international markets through partners. We also have a wholly owned subsidiary in Singapore, that has a Service Based Operator License and it would shortly commence the Wholesale International VoIP business.

Brief us about the Data Centre, Web Services, Network Integration, Internet services and VOIP services growth?
We have been growing at a CAGR of 36% for the last 5 years. Recently, the fastest growing areas are the Data Centre and Web Services followed by Network Integration

What is your focus area going forward?
Our focus shall remain a host of Network and Application services to small and medium enterprises. To this end, we shall be adding depth and variants to our existing service categories.

Brief us about your stake sale to Madison India Capital?
We raised Rs149mn from Madison India Capital late last year and our board has now approved the allotment of shares for a further Rs80mn from Grantie Hill India Opportunities Fund. Both these fund raising are via a preferential allotment.

The funds will be utilized to invest primarily in our expansion; setting up a 30,000 square foot Data Centre and adding MPLS/IP VPN services to our service range

Who are your competitors?
Our Competitors - Rediff for our Hosting, Business Email and Domain registration business; Sify in our Internet Data Centre Business; Tata Communications in our VoIP/Internet Telephony Business. In the Network Integration space there are many competitors.

Brief us about your financials? What is your revenue target for FY11?
As already mentioned we have been growing at a CAGR of 36% for the last 5 years. We ended FY10 with consolidated revenues of Rs1.95bn and a PAT of Rs115mn.

We do not provide any forward financial guidance. However, we are extremely confident that at the very least, we shall definitely keep pace with the last 3 years of growth over the coming 3 years.

What is your current debt?
Standalone current debt as on 31st March 2010 is Rs480mn.

Brief us about your hiring plans?
We currently have about 320 people and plan to hire an additional 60 people over the next 18-20 months, which would mean an expansion of up to 9% in work force.

This would be primarily to bolster our Managed Services Delivery capability, which is key area under the data centre services.

What makes you different from others?
Whilst the differentiators vary from service to service, one of the macro differentiators is our exact mix of services, which is unique to us. This enables us to grow profitably as infrastructure and other resources are cross utilized.

The other thing that makes us different is our ability to be first to market with most services over a consistent period of time. This is achieved by being focused on solutions for business needs, rather than technology alone.

What is your message to the shareholders?
We already have in place an extremely solid foundation - our people, infrastructure and brand. Our positioning in relevant service verticals will ensure that we continue to grow at the very least at the growth in the market for those services.

However, with the expansion in our service range and investments in infrastructure for the long term, we should be able to deliver even more than we have in the past.

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