Indian software services firm Tech Mahindra has announced that it has signed a joint venture agreement with Saudi Arabia’s Midad Holding.
The Indian firm will have 51 per cent ownership in the joint venture called Tech Mahindra while Saudi-based Midad, a subsidiary of Al Fozan, will have a 49 per cent stake.
The company will be headquartered in Al Khobar but Tech Mahindra Arabia will have presence across most of the major cities in the Kingdom post regulatory approvals.
“Saudi Arabia has been a focus market for Tech Mahindra and we are excited about the economic growth potential the region has,” said CP Gurnani, managing director and CEO, Tech Mahindra Limited.
“This joint venture will establish the company as a leading player in providing IT and IT-enabled solutions.”
Through the joint venture, Tech Mahindra Arabia will provide services in areas of consulting, application development and management, maintenance service and business process outsourcing among many others.
The company provides IT services to telecoms, oil and gas companies, utilities and manufacturing firms.
“The purpose of the joint venture is to leverage Tech Mahindra’s global expertise in Information technology while maximising local content,” said Mohammed Al Baadi, managing director and CEO, Midad Holding.
Overall IT spending in Saudi Arabia is set to increase 10.7 per cent year on year in 2014 to total $11.50 billion, according to the latest forecast from International Data Corporation (IDC).
IDC further expects IT spending in the Kingdom to increase at a compound annual growth rate (CAGR) of 8.9 per cent from 2013 to 2017 to reach $14.20 billion in 2017.
Government will be the fastest growing market for the IT sector during this period, with investment expanding at a CAGR of 12.9 per cent through 2017.
Consumer, communications, finance, and oil and gas sectors will be other massive IT spenders during the five-year forecast period, IDC said.