India's leading information technology services provider, Tata Consultancy Services [Get Quote], will explore the option of merging some of its group companies.

Speaking at the company's second Annual General Meeting, Tata Group chairman, Ratan N Tata, said: "It makes sense merging some of the group companies. However, Tata Elxsi [Get Quote] is into animation and will be a standalone business." He, however, did not specify any name. IT solutions provider CMC Ltd [Get Quote], Elxsi and Tata Technologies are the other IT companies of the group.

The company management also announced it has earmarked a capex of Rs 1,400 crore (Rs 14 billion) for FY'08. This is an increase of Rs 235 crore (Rs 2.35 billion) from the Rs 1,165 crore (Rs 11.65 billion) spent during the previous financial year. TCS Managing Director and Chief Executive Officer S Ramadorai said that Rs 300-350 crore (Rs 3-3.5 billion) would be spent on technology and the remaining for IT infrastructure.

On the rising rupee, Ratan Tata said, "It is a matter of concern for us like anyone who is into exports. But as offshoring is becoming a critical business strategy among the US, European and Latin American companies there will be some balancing act." Ramadorai added: "We are looking at expanding our Latin America centre. But this will be through organic growth."

Answering a shareholder's concern on why Indian IT companies cannot be the next Microsoft or Cisco of the world, Tata remarked: "This is something that I have been discussing with Rama (Ramadorai).