India's largest BPO plans $600 mn IPO in US

ndia's largest business process outsourcing (BPO) firm, Genpact, plans to raise $600 million (around Rs 2,500 crore) in an initial public offering (IPO) of its shares on the New York Stock Exchange (NYSE). The face value of the offered shares is 1 cent.

It will thus become the largest Indian IPO in the US and follows two other Indian BPOs - WNS (NYSE) and EXL Services (Nasdaq). The proceeds from the share sale will be used to repay debt and for general corporate purposes, including potential acquisitions, according to a filing with the U S Securities and Exchange Commission which has not yet become effective.

Genpact will apply to have its common shares listed on the NYSE under the symbol "G". The joint bookrunning managers are Morgan Stanley, Citi and JPMorgan.

General Atlantic and Oak Hill Capital Partners hold 60 per cent of the company's equity, while GE owns the remaining 40 per cent. All the three shareholders are diluting their stake throught the proposed IPO,
according to the SEC filing.

Genpact ceased to be a wholly-owned subsidiary of GE in December 2004. GE accounted for almost 74 per cent of the company's $613 million (around Rs 2,600 crore) in 2006 sales. The remaining 26 per cent came from clients that Genpact refers to as 'global clients'.

Genpact employs a little over 28,000 people across its centres in India, China, Hungary, Romania, the Philippines, Mexico and the US. The company's net income more than doubled last year to $39.8 million (around Rs 170 crore) as sales to customers other than GE almost quadrupled. The IPO will be managed by Morgan Stanley, Citigroup Inc. and JPMorgan Chase & Co.

Genpact recently received an in-principle clearance to set-up three Special Economic Zones (SEZs) from the Ministry of Commerce in Bhopal, Bhubaneswar and Jaipur. Discussions are in an advanced stage with the three state governments.

Genpact President & CEO Pramod Bhasin had then said: "Our growth, which has been in excess of 20 per cent per annum over the last several years, is encouraging us to plan ahead and partner with state governments to identify expansion sites that will serve the larger Indian BPO/ ITES sector. These new facilities will offer exciting career and growth opportunities to the youth in these states."

Genpact is hiring in excess of 800 new employees a month in India. While hiring for the new facilities has already begun through Genpact's employment offices, the company will offer existing employees from its other centers the option to take a transfer to these facilities.