Infosys hiving off PPS as a subsidiary; Finacle not part of it

Country's second largest IT firm Infosys is in the process of spinning off products and platforms business into a separate subsidiary as part of efforts to focus on the next phase of growth.

The subsidiary will not include Infosys' signature banking software, Finacle.

"We are in the process of forming a subsidiary for our products and platforms business. Once formed, we will be able to share more details on the same. Finacle will not be part of this subsidiary," an Infosys spokesperson told PTI.

The products, platform and solution business (PPS) contributed 5.7 per cent of Infosys' total revenues of USD 7.4 billion in 2012-13. It secured 51 deals in the same period.

The firm had also announced investing up to USD 100 million in the business, which focuses on higher revenues from innovation and IPR.

During October-December of 2013-14 fiscal, Infosys won 14 deals - eight for platforms and six for products. It has also launched TradeEdge, a platform for the retail segment.

Though Infosys declined to give further details, people following the development suggested that the subsidiary may be in place by next fiscal and could be headed by Sanjay Purohit, who is a Senior Vice President and global head of PPS.

Since the work profile, marketing and other strategies of PPS are different from the firm's traditional businesses like developing custom software for companies and maintaining their computer networks, such a move gives an opportunity to drive more revenues for the unit, they added.

Set up in 2011 as part of the Infosys 3.0 strategy, the company was aiming to get at least one-third of its revenues from intellectual property-based software products, platforms and solutions by 2020.

However, the PPS unit has not performed as expected with the exception of Finacle core banking unit.

According to analysts, the move will allow the PPS unit more space to expand and build software and products to accelerate growth.

Angel Broking Research Analyst IT Ankita Somani said PPS has not been contributing much to Infosys' overall revenues.

"Such a move can help the firm's growth plans and aid it in expanding its product offerings separately," she added.

Infosys already has separate subsidiaries like Lodestone and Infosys BPO. Earlier, its Infosys Australia was a separate subsidiary, but was later merged with the company.