Aditya Birla Minacs plans KPO acquisition

by: Johns
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Aditya Birla Minacs, the Aditya Birla Nuvo Group’s business process outsourcing (BPO) company, is eyeing acquisition of a knowledge process outsourcing (KPO) company worth $150 million (around Rs 600 crore). The company is targeting firms with a global footprint.

“We are looking for acquisition across geographies. The size of acquisition could be the same as our last acquisition (Minacs for $125 million) or more,” Dev Bhattacharya, group executive president, IT and BPO business, told Business Standard.

The company, if needed, would look at liquidating a part of the equity stake for raising funds for capital expansion as well as acquisitions. A slew of private equity funds has already knocked the door of the company and no decision has been taken yet, said Bhattacharya.

The KPO business of Aditya Birla Minacs, with a single banking client currently, is a fairly new venture. It will focus on verticals like retail, telecom and BFSI. The operations are currently headquartered in Bangalore and have a team of 50 people.

The recent sub-prime mortgage crisis in the US and the dollar volatility did hit the company a bit harder than its counterparts. “Overall, we had a hit of $30-40 million. The reason being the Canadian dollar’s appreciation over the US dollar was almost 23 per cent and in India, the currency appreciated by almost 10 per cent,” added Bhattacharya.

It also impacted the company’s integration plans with Canada-based Minacs.

However, going ahead, Bhattacharya expects the company to clock a growth rate of 20-25 per cent year-on-year. At the end of March 2008, the company’s revenue was $392 million (around Rs 1,680 crore) and it expects to touch $430 million (around Rs 1,800 crore) by the end of this year. Bhattacharya aims to touch revenue of $1 billion in the next two years.

Bhattacharya also sees 50-60 per cent of work being offshored to India and other low-cost destinations. “A lot of customers facing on-site operations and other such functions will continue to be in Canada. But a lot of support work will be moved to India,” he added.

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