Cognizant Invests $700 Million in India Real Estate Expansion
Cognizant Technology Solutions, a US-based firm with a substantial offshore presence in India, has amplified its real estate investment strategy in the country. The company's revised plan earmarks a total of $700 million for real estate development from 2011 through 2015, representing a significant increase of nearly $200 million from its initial commitment.
This augmented investment will fuel the expansion of Cognizant's campuses in India by an additional 10.5 million square feet. The comprehensive program encompasses expenditures related to land acquisition, construction of facilities, and furnishing of new company-owned IT development and delivery centers. These centers will primarily be situated in regions designated as Special Economic Zones (SEZs) within India.
Expansion Beyond Initial Projections
Initially, in February 2011, Cognizant announced a $500 million investment in its India infrastructure expansion through the end of 2014. However, by the beginning of 2012, the company chose to extend its planning horizon for the India real estate program to 2015 and beyond, according to a company spokesperson.
The company's financial position supports this ambitious undertaking. As of the first quarter ended March 2012, Cognizant reported $2.5 billion in cash and short-term investments. During that quarter, the firm allocated approximately $60.5 million for capital expenditures.
"During 2012, we expect our capital expenditure to total approximately $370 million," Chief Financial Officer Karen McLoughlin informed analysts during a discussion of the company’s financial results.
Workforce Growth in India
Cognizant's global workforce stood at around 140,500 employees at the close of the March quarter. A significant portion of these employees, nearly 105,000,are based in Cognizant's India centers, highlighting the strategic importance of the country to the firm's overall operations.