TCS, HCL, Cognizant are investing in Tier-II cities of Tamil Nadu

The metro cities’ congestion, crowds and lack of free space are a big no no for the IT giants in India. They are preferring places where they get facilities of a metro, yet a lot of free space. Guess what? All of a sudden, the tier II cities in Tami Nadu like Coimbatore and Madurai are getting big bang investments. Earlier we have reported how Coimbatore in Tamil Nadu is becoming a smart base for the start ups in Bangalore. However, this time not only the start ups, IT giants are like HCL, Cognizant are investing in these tier 2 cities.

HCL Technologies has announced an investment of Rs 6,600 crore. Most of the investment will go into Madurai in southern Tamil Nadu. Cognizant will develop delivery centres at an investment of over Rs 1,000 crore in Coimbatore and Chennai and bureaucrats are hopeful about TCS expanding its workforce in the city. Officials with the state IT department said a large portion of the Rs 10,950 crore in IT investments will go into smaller cities and towns in the state. The expansions are in Coimbatore, Madurai, Trichy, Tirunelveli, and Salem, where the state government has managed to sell land to IT firms.

Zoho Corp is setting up a development centre in Tenkasi, where the Sridhar Vembufounded company will recruit from neighbouring colleges to develop software products for global clients.

"You need to take product building into tier II and tier III towns. It is now a requirement - because IT's skill requirements are changing with the way digitisation is spreading. And the talent that resides beyond the metros is attractive now. The second consideration is costcompetitiveness," Premkumar S, executive vice-chairman and MD of HCL Infosystems told The Economic Times.

However, the constraints lie in public infrastructure such as roads and airport connectivity as the IT business is strongly client-oriented. TCS' rival Cognizant has committed to developing delivery centres in Coimbatore, besides making progress in expansions in Chennai. R Chandrasekaran, executive vice-chairman at Cognizant told the ET, there were cost considerations too about going deeper into Tamil Nadu. "It is cheaper to deliver for a tier II city but that is possible in Tamil Nadu because the education infrastructure in say Trichy, or Coimbatore is comparable to that of Chennai."