Meltdown-crunched Citigroup is busy shedding stakes that once were the crown jewels in its Indian portfolio. After selling its BPO arm, Citigroup Global Services, to TCS on October 8, the US financial giant has put on block its 40 per cent stake in Chennai-based financial software firm Polaris Software Labs for sale, a source connected with the development told Hindustan Times.
The company is understood to have initiated talks with two Indian and one US IT firms. “A sale of stake in Polaris is the next in Citi's strategy. They have already decided and have conducted two rounds of negotiations with a few potential buyers,” said a source. Polaris stake sale will be in continuation of Citi's strategy to offload non-strategic assets to offset its sub-prime related losses, he added.
Citigroup holds 22.88 per cent directly and its wholly-owned subsidiary, Orbitech, owns another 20.45 per cent. Collectively, Citi holds a little over 43 per cent stake in Polaris. Its potential buyers include IBM and Wipro. However, IT analysts say, TCS may also join the race.
When contacted, a Citigroup spokesperson declined comment on the ground that the company does not comment on ‘market rumours and speculations’. A questionnaire sent to Polaris seeking its comments remained unanswered. Polaris spokesperson Shailesh Dhawla did not respond to phone calls seeking comments.