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Intel Plans Investment in India

The Associated Press

MUMBAI, India -- Intel's(INTC Quote) investment arm said Wednesday that it will invest $23 million in three Indian companies in areas ranging from online marketing to education.

The investment comes as Intel's revenue is shrinking and the global credit crunch has made funding, even to relatively fast-growing countries like India, increasingly scarce.

"We believe that we haven't even seen the tip of the iceberg as far as the market and business potential in India. We continue to be very bullish," said Sudheer Kuppam, managing director of Intel Capital for India, Japan, Australia, New Zealand and South East Asia, by phone.

The new investment will go to One97 Communications Pvt. Ltd., which provides value-added services like ring tones and games for mobile phones, IndiaMART.com, an online business-to-business marketplace, and Global Talent Track, a vocational educational institute.

Intel, the world's largest chipmaker, slashed fourth-quarter profit forecasts twice on flagging demand, and is now projecting a sales decline of more than 20% from a year earlier. The Santa Clara, Calif.-based company is scheduled to report quarterly results Thursday.

Kuppam said Intel Capital invests, on average and excluding one-time large deals, about $500 million a year.

"You get much better value for your money in the current environment," he added. "We are going to be really active."

Funds will come from the $250 million Intel Capital India Technology Fund, which was established in December 2005 and has so far invested about 40% of its funds, Kuppam said.

Last year, Intel Capital invested about $50 million in nine companies in India. That amounted to 8.5% of total funds committed globally, excluding a $1 billion investment in Clearwire(CLWR Quote), an Internet provider specializing in a new type of wireless broadband technology called WiMax.

The parent company employs about 3,000 people in India and opened its largest manufacturing site outside the United States in Bangalore, India, in 1998. Intel's investments in India to date have been over $ 1.7 billion.

The company does not break down its revenue by country, but spokeswoman Saranya Rustagi said Intel has no plans to change the size of its work force in India as global demand shrinks.