Domestic rating agency Icra is on the lookout for five to six medium-sized outsourcing firms as it plans to step up its presence in the high-end BPO space. |
The company intends to capitalise on its analytical strengths and is targetting mid-sized US investment bank customers. |
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P K Choudhury, managing director of Icra, said, "We plan to acquire BPO firms that offer high-end analytical services. Here, we do not expect to face much competition. Primarily, we are not looking at price-sensitive customers, but at high-cost analysis jobs that are not driven by volumes." |
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The Indian BPO industry, now in the fourth phase of evolution, is seeing an increasing trend towards Indian companies acquiring small- to medium-sized businesses both in the domestic and overseas market. |
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The rating agency is looking at buying BPO operations in the range of Rs 5 crore to Rs 7.5 crore each. |
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"Investment is not a constraint. More important is the ability for us to capture client base, and get good, skilled people along with the infrastructure facilities," said Choudhury. |
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Some time back ICICI Onesource acquired Customer Asset BPO for $19.3 million. "Many deals are taking place today "" some for as less as Rs 3 crore," said Choudhury. |
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"Icra's plans to increase its BPO business inorganically also stems from the economies of scale, which will help bring down costs and ensure consistent quality control." |
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A recent report by Icra on BPOs states that US and European companies are currently experiencing strong profitability crisis. |
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"With revenue growth stagnating for the last 3 years, these companies are under grave pressure to cut costs, and have thus started outsourcing their activities in a major way to countries such as India, Brazil, the Philippines and China," the report stated. |
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Icra hopes to capitalise on its relationship with its global technical partner "" Moody's, which holds 31 per cent stake in the domestic rating agency. |
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"Our brand name will give foreign companies the confidence. Today, companies are still testing the waters and are not too confident in terms of the quality," said Choudhury. |
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Asked whether the recent tax debate is a cause for concern, Choudhury said: "We sometimes tend to overstate the tax issues because it tends to become a good negotiating point." |
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