A national flag and rakhis are tied in memory of the victims at Lumbini Park, one of Saturday’s blast sites, in Hyderabad on Tuesday. (AP)

Hyderabad, Aug. 28: The weekend blasts haven’t shaken investor confidence in a city racing with Bangalore to become India’s premier IT hub, but big business is convinced Hyderabad needs to step up security.

Companies are worried about the frequency of the attacks since the weekend explosions and the ones at Mecca Masjid came within three months of each other.

Hyderabad, having drawn Google and Oracle and ready to host Microsoft’s first development centre outside the US, should also be concerned about foreigners’ reaction.

Some companies said that while Indian businessmen may be hardened to decades of security concerns and political problems, foreign investors can be more fickle. Others are keeping a wary eye on the possibility of having to pay higher insurance costs because of the violence.

A western diplomat said foreign investors were watching the situation closely but things had not yet got to the stage when they would consider pulling out or scaling back. “The bottom line is that it would take a lot more than this (the explosions) to really shake them,” he added.

Nasscom president Kiran Karnik said Saturday’s attack showed once again the need to beef up security. “It is the second such incident in a short period. Although these attacks target the general public, the industry will also have to be aware of any security threat.”

Many are clear in their mind that the growth will not lose steam. Saugat Mukherjee, director of the state chapter of the CII, said what has picked up in Hyderabad will sustain. “We feel these are stray incidents.”

That terrorists are choosing Hyderabad to mount attacks is a cause for concern but the city’s “brand image” has not been tarnished. “I don’t see a loss to the brand image, which has been built over years,” Visakha Industries managing director G. Vivekananda said.

B.V.R. Mohan Reddy, managing director of Infotech Enterprises, a mid-sized software services firm, warned of problems if the attacks become a pattern. “Incidents of a sporadic nature may not have a major impact but if these become frequent, they will become a major concern.”

With pools of highly educated talent, Hyderabad emerged in the 1990s as a competitor to Bangalore, which has been India’s long-standing infotech capital. Infotech exports from Andhra Pradesh jumped to $4.5 billion in 2006-07 compared with $3 billion in the previous year.

Shakti Sagar, managing director of ADP Software, said companies need to restore investor confidence. “Some investors are worried. We have been telling them these are stray incidents but for someone who has never travelled outside the US, it certainly causes them concern.”

The US embassy in Delhi has urged American citizens to be cautious while travelling to Hyderabad. But an embassy spokesperson said the bombings would have no impact on plans to open a consulate-general in the city.