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FI Group buys Indian computer company

FI Group became the latest in a line of UK technology companies to make a passage to India, after it announced yesterday that it was buying a New Delhi-based computer services company for pounds 22m.

News that fast growing FI was making its first acquisition outside the UK plus a forecast from the company that profits for the current half year would be 54 per cent higher at pounds 4.3m, sent FI's shares 107.5p higher at 845p.

Shares in the company were floated at 235p less than two years ago. The deal to buy 76 per cent of IIS Infotech with an option on the remaining stake will be part funded by a pounds 14.6m one for 12 rights issue at 640p a share.

FI joins UK computer companies like Logica and Micro Focus which have spotted the potential of the booming Indian IT market. India already produces more IT graduates than the USA each year, which is attractive given the world-wide shortage of computer programmers to deal with the millennium crisis.

As Hilary Cropper, FI's chief executive points out, the cost of employing an Indian graduate is a third lower than a UK graduate, an important consideration given soaring wage inflation in the industry.