Intelenet sees $100m revenue in 2005-06

Intelenet Global Services, the joint venture between Housing Development Finance Corporation (HDFC) and Barclays Bank, is expected to cross the $100 million mark in revenue in 2005-2006.

The company, which has already reached last year's turnover figure in the first six months of this fiscal, will go for an initial public offering in a few years, Deepak Parekh, HDFC chairman, said.

Roger Davis, Barclays chief executive, UK banking, said the bank has already commenced outsourcing some of its services to Intelenet.

These services include data collection, data processing, accounts opening and voice services. The work being currently outsourced is restricted to the bank's UK business. It will start outsourcing other businesses gradually.

HDFC today signed the master services agreement with Barclays Bank Plc, which completes the partial divestment of its stake in Intelenet in favour of Barclays. HDFC had sold its 50 per cent stake in Intelenet to Barclays for a total consideration Rs 164 crore.

Intelenet was set up as a 50:50 joint venture between Tata Consultancy Services (TCS) and HDFC in 2000. The Tatas sold their stake to HDFC ahead of the TCS initial public offering. HDFC, in turn, sold the 50 per cent stake to Barclays.

Barclays is a UK-based financial services conglomerate operating in over 60 countries.

The Intelenet board will have three representatives each from Barclays and HDFC. The existing management team of Intelenet has Susir Kumar as the chief executive officer.

Davis added that in addition to the current outsourced business, at least 30 per cent of the bank's customers have evinced interest in outsourcing some of the processes. This implies huge opportunities for Intelenet which is focused on the overseas business.

Davis also evinced interest in entering the retail banking space in India.

At present Barclays is involved only in investment banking and private equity investments in India. Barclays Capital had recently picked up a 4.5 per cent stake in private sector UTI Bank.

Intelenet Global Services chief executive officer Susir Kumar M said with the expected rise in outsourcing, the company hopes to cross the $100 million revenue mark in 2005-2006.

The company is also setting up a centre in Mumbai which will be exclusively for Barclays. This 2,000-seat facility is expected to go on stream in January next year. The total employee strength of the company stands at 4,700 which is expected to grow to 5,500 next year.

Kumar said the outsourcing will enable cost savings of at least 40-50 per cent for Barclays.

On the possibility of HDFC selling more stake in the joint venture, Parekh indicated that while private equity investors have shown interest in picking up a stake in Intelenet, HDFC and Barclays have currently no plans to sell their stakes.

He also ruled out any possibility of Intelenet picking up other BPO outfits and going for an inorganic growth. Intelenet has currently 42 processes in place with 18 customers, six of which are banks.