Raman Roy eyes Citi's BPO arm
Former head of Wipro BPO has joined the race to buy 80% in Citigroup Global Services, formerly known as E-Serve, reports Venkatesh Ganesh and Indulal PM.business Updated: Jun 22, 2007 20:15 IST
Call it the return of the BPO industry stalwarts. Former head of Wipro BPO, Raman Roy controlled Quattro and private equity firm 3i led by ex-Infosys BPO chief Akshay Bhargava are the new entrants in the race to buy out 80 per cent in Citigroup Global Services, formerly E-Serve.
Raman started Spectramind, the first BPO company in the country and exited from it after selling it to software major Wipro in 2002. He now runs Quattro, funded by Texas Pacific, Chrys Capital and Olympus Capital.
Bhargava was the head of the Infosys BPO, formerly known as Progeon. Last year, he quit Infosys and joined PE firm, 3i. 3i has been aggressive in its investments in the BPO segment and has invested approximately Rs 200 crore in KNEIP, a Luxumborg-based outsourcing company that does BPO work for the European fund and asset management industry. Bhargava has been appointed non-executive director of KNEIP.
Citigroup had delisted E-Serve in 2004 and subsequently enhanced its stake to over 96 per cent. Now, it has put its BPO operations on the block and is planning to sell an 80 per cent stake in its BPO arm to a strategic partner having experience in operations. In a recent report, Forrester Research has pointed out that captive units of global companies are under pressure from rising wage costs and attrition and unrealistic business models. "Plagued by unrealistic cost models, attrition among employees, lack of process integration and adequate management support are the key causes for captive centres getting into trouble," said Sudin Apte, India research head of Forrester. The company is currently valued at $ 600-750 million.
IBM, Automatic Data Processing (ADS), Infosys, EDS, Genpact, CapGemini and private equity players such as Blackstone and General Atlantic are the other firms in the race for Citi's BPO operations.
Citi Global Services currently employs 8,000 people with offices in Mumbai and Chennai. It provides financial and banking customer support services to Citigroup's worldwide operations. Last week, a leading private equity company Blackstone bought Mumbai-based BPO firm Intelenet for $200 million.