ITI eyes JV route for revival & turnaround

 
The company is trying to reinvent and reorganise itself by floating three JV companies. It is taking the public-private partnership route for this purpose. Sources said following recommendations of Darashaw Consultants, ITI has invited Request for Qualification cum Request for Proposal for formation of three joint venture companies one each at Bangalore, Rae Bareli, and Naini (Allahabad) to manufacture telecom and IT related products.

The JVCs will be see successful Indian/global private manufacturers holding majority/controlling stake between 51-74 per cent, they added. While at Bangalore it will be for manufacturing IP Core Systems, at Rae Bareli it is for wi-max base station trans receiver equipments and associated customer premises equipments. At Naini, it is for wide range of passive optical networks and optical transmission equipments consisting of optical line terminal and optical network terminal/units.

Sources said the bidders who will come in as strategic partners, could either do so on their own or in consortia for setting up the JVC with ITI. Stating that the total project cost and investments would be worked out once the partners came in,  they said a clear picture on JVs would be crystallised by year-end when they are expected to commence production.

Further, they said that a positive turnaround is expected in the next two to three years  when these will provide substantial returns to beef up ITI’s financials.  Incidentally, ITI was in the red with a loss of Rs 668 crore for the fiscal year ended March 31, 2009 against a loss of Rs 358 crore in the previous year. The company attributed its losses to overheads (salary & social welfare costs) as also foreign exchange fluctations.