The Shiv Nadar-promoted software services company HCL Technologies will use its Rs 1,500 crore (Rs 15 billion) cash reserves for acquisitions, joint ventures and investing in expansion.

Besides, the company also expects that a huge cash reserve would work in its favor while bidding for projects.

HCL Technologies, the country's fifth largest software exporter, has identified software product companies as its acquisition targets.

"Product companies are a good buy at this time. We are looking at that space," said Nadar, who is the chairman and managing director of HCL Technologies.

However, the company has not earmarked any specific amount for the acquisition purpose. "We have a healthy cash reserve, which provides us a good acquisition currency. We will utilise this to buy companies or enter into joint ventures," Nadar said.

When asked if the entire cash reserves of Rs 1,500 crore in the company's books for acquisitions, Nadar said that high cash reserve needs to be maintained at all times for the comfort of the company's overseas clients and to manage growth.

"Not many Indian companies have such a large cash reserve. When we are bidding for projects, this will become a great differentiator. Customers will have a higher comfort to give us the job compared to a company with a much lower cash reserve," Nadar said.

Besides, the cash reserves will also be used for capital expenditure to build additional development centres.

"We will be required to invest in building additional development centres. The company invested Rs 47.7 crore (Rs 477 million) on capital expenditure during the quarter," he said.

As a part of its strategy to ramp up operations, HCL Technologies will hire 5,000 people for its software operations during the current financial year.

In the high growth business process outsourcing business, the company will recruit 1,200 people in the financial year 2003-04.

"We will hire 5,000 people for our software services operations, while for the business process outsourcing activities we will take another 1,200 people," Nadar said.

The net employee addition during the quarter (July-September) was 1,962. The current headcount of the HCL Technologies is 12,030. The current annualised attrition rate is 8.1 per cent.