When WNS Holdings decided to list on the New York Stock Exchange last July, the timing was not exactly perfect as Indian markets were in the grip of a downturn after the May-June crash.
But, the stock has held up very well for the company which has grown from being an outpost department of British Airways to being a pioneer among Indian business process outsourcing (BPO) companies, both in operations and in overseas listing.
Its chief executive officer Neeraj Bhargava, a former McKinsey consultant who studied the BPO industry in-depth before taking a plunge into it, spoke to Prerna K Mishra.
Q : How has the market treated WNS? How did listing help?
A : For us, the listing was more of a brand building exercise. We wanted our brand to be recognized in the US and so we created news through the NYSE listing. Fortunately, despite bad timing, we are currently trading at about 50 per cent higher than the price that we listed at.
WNS raised $224 million through the listing. How much of this will be used as acquisition currency?
A : So far, nearly 80 per cent of our growth has been organic. So a majority of it will still be organic. We will spend a part of the money raised on geographical expansion. To begin with, we will go to Eastern Europe in the next couple of months by establishing a direct presence there. However, an acquisition in the near future is not ruled out. And since we are a debt-free company, we can anytime raise additional funds to buy out companies.
What are your expansion plans for India?
A : The next phase of our expansion will begin by the end of this quarter. Last quarter, we already had 11,000 employees in India. This is a significant portion of our global work-force of 12,000 employees. In the next phase of growth, we will expand more in the north, especially in Gurgaon.
Why did you do a change over from being a captive for British Airways to becoming a third party vendor?
A : Around the time of the switch-over, our growth had consecutively stagnated for six quarters. Captives are wonderful entry points as companies need all the trust they can garner to send work offshore. But once these captives reach a critical mass, they tend to stagnate. So the switch becomes necessary. We have seen other veterans like GE spinning off their BPO operations into a third party venture and succeed.
How much of your revenue still comes from BA? Which vertical contributes the maximum?
A : Nearly 11 per cent of our revenues still come from BA. Our engagement with the company has been extended till 2012. Currently, the travel domain itself contributes about 43 per cent to the revenue while banking and finance contributes nearly 34 per cent.
Are the BPO scams (involving data theft/privacy violations) reported of late an area of concern? Do you see them having an impact on client acquisitions?
A : They will not have an impact on long-term client relationships. But security concerns have certainly come to the forefront of all new negotiations happening in the industry.
For serious players, however, it is not of consequence as we already follow the European data protection laws that are considered most stringent. As far as revenues are concerned, we have issued a guidance of 35-40 per cent growth.
In 2005-06, we clocked $148 million in revenues and expect to take this to $205 million this year.