EXL first Indian BPO firm to enter Nasdaq

Citi, Goldman joint lead managers for $75 mn issue.

In what will be the first overseas listing by an Indian BPO vendor, EXL Services Holdings will list its shares on Nasdaq to raise up to $75 million.

The company has filed its registration statement with the Securities and Exchange Commission (SEC), USA. Citigroup Global Markets and Goldman Sachs will be the joint lead book-running managers for the offering. The co-managers for the offering will be Merrill Lynch & Co and Thomas Weisel Partners LLC.

EXL plans to use the proceeds from the listing to redeem its preferred stock held by some of its directors, officers and significant stockholders, and to repay senior promissory notes held by them. Besides, a part of the funds raised will also be used for working capital and general corporate purposes.

The BPO service provider is yet to finalise the timing and completion of the offering. Pointing out that the listing is subject to market conditions and other contingencies, the company said in a statement that it will soon seek the approval of its board of directors to this effect.

Interestingly, the company has said in its statement filed with the SEC that it has no plans to hand out cash dividends to its shareholders in the near future.

"We have never declared or paid any dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock," the statement said.

The present shareholders in the company are Oak Hill Partners, ST Ventures, NUI Investments, Vikram Talwar (the company's CEO) and Rohit Kapoor (the company's president and CFO). (See chart.)

Founded in April, 1999, the company started commercial operations in October, 2000. On August 1, 2001, EXL Inc. was acquired by Conseco and operated as Conseco's wholly-owned subsidiary until November 14, 2002. In November, 2002, a group of investors, who included Vikram Talwar, Rohit Kapoor, Oak Hill Capital Partners L.P., FTVentures and certain other senior members of the company's management team, bought it back from Consceco.

The company, according to its filing with the market regulator, generated a revenue of $43.1 million for the nine months ended September 30, 2004, up 126.8 per cent from $19.0 million for the nine months ended September 30, the previous year.

Nasdaq calling

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• EXL will use the proceeds to redeem its preferred stock held by some of its directors and significant stockholders
• A part of the funds raised will also be used for working capital and general corporate purposes
• The company has no plans to hand out cash dividends to its shareholders in the near future