Bangalore: Nearly a decade after Infosys Technologies Ltd, India’s second largest software exporter, sought land for a second development campus in Bangalore, it is closer to acquiring property five times larger than its main campus.
The Karnataka government on Tuesday said it has cleared a plan to convert for industrial use 400 acres of agricultural land that Infosys had bought from farmers in Sarjapur on Bangalore’s outskirts.
Infosys can register the property after the change is notified by the Bangalore Metropolitan Regional Development Authority, said Katta Subramanya Naidu, the state’s information technology minister told reporters.
Infosys’ main campus in Electronics City, a key software hub in Bangalore, is spread over 79 acres with capacity for 25,000 professionals, but has been filled to the brim the last two years.
The firm is now adding more people in other cities such as Pune, Hyderabad and Chennai.
“The process has taken a long time—around three years —for land conversion,” said V. Balakrishnan, chief financial officer at Infosys. He could not give an estimate for the cost of land acquisition immediately.
In 2001, Infosys had sought additional land for a second campus but the proposal was put on the back-burner as the government, then headed by S.M. Krishna, currently external affairs minister, was reluctant to acquire the land through its agency, Karnataka Industrial Areas Development Board.
The following year, former prime minister H.D. Deve Gowda, who supported a coalition state government led by the Congress party, raised objections to Infosys seeking more land. That sent Infosys to other states as it set to expand operations.
Infosys is not the only firm to face land hurdles. Land acquisition for industrial expansion across India is mired in controversies. Last year, Tata Motors Ltd had to exit from Singur in West Bengal, where it was setting up a plant for its low-cost car Nano, after violence broke out over compensation to the local people for the land.
Ajay Paramar, head of research at Emkay Global Financial Services Ltd, a Mumbai brokerage, said the Sarjapur land would bring more operational efficiency to Infosys as it can seat more staff in a single location.
In Bangalore, Infosys says it is content for now with the approval for the 400 acres it has purchased so far.
In 2006, Gowda’s son, H.D. Kumaraswamy, had approved a proposal for Infosys to acquire 845 acres for an integrated software and residential complex.
“Now we are expanding in Pune, Hyderabad and Chennai. This land will help us plan for the second campus,” said Balakrishnan, without elaborating.
Infosys shares rose by Rs10.35, or 0.49%, to end on Tuesday at Rs2,142.65 on the Bombay Stock Exchange.