Promising debut for Indian outsourcing firm

An outsourcing firm based in India rose 22.5 per cent in its first day of trading on Wednesday, the most promising debut from an initial public offering all month.

WNS Ltd closed at $24.50 a share on Wednesday on the New York Stock Exchange, above its IPO price of $20. The stock had opened at $21.10 a share Wednesday morning.

A total of 11.2 million American Depository Shares were sold in the offering, which priced at the high end of an expected $18 to $20 range set by underwriters.

Mumbai-based WNS is the first initial public offering this month to price at the high end of its targeted range. The five other deals so far in July -- including that of Chart Industries Inc., which is debuting Wednesday on the Nasdaq Stock Market -- either priced at the low end or below underwriters' expectations. All previous IPOs have ended their first days of trading nearly flat with their offering prices.

WNS provides business outsourcing, including airline customer service and loan processing for financial services companies. Its customers, who are concentrated in the United States and Britain, include IndyMac Bancorp Inc. and Travelocity, a unit of Sabre Holdings Corp.

WNS's industry is a fast growing one. The National Association of Software and Services companies, a trade group in India, forecast in a joint report with management consultants McKinsey & Co. that India's outsourcing market will grow from $5.2 billion (euro4.13 billion) in revenue in fiscal 2005 to $25 billion (euro19.86 billion) in fiscal 2010, a compounded annual growth rate of 37 percent. WNS, which began in 1996 as a unit of British Airways PLC before branching out to serve other companies, will receive only a portion of the money raised in the offering; 60 percent of the shares sold in the offering came from the company's prior owners, including British Airways. Private-equity firm Warburg Pincus, which acquired a controlling stake in WNS in May 2002, continues to control about than 54 percent of the company after the IPO.

In the fiscal year ended in March, WNS earned $18.3 million (euro14.54 million) on revenue of $202.8 million (euro161.12 million), compared with a loss of $5.8 million (euro4.61 million) in fiscal 2005.