Prudential, TCS in talks for $1.5 bn deal

IT major Tata Consultancy Services (TCS) is in the early stages of negotiations with the UK-based Prudential Insurance for around $1.5 billion (around Rs 6,000 crore) outsourcing contract. If the company wins the deal, this would be the largest deal for TCS and the Indian IT industry.

According to sources close to the deal, TCS is working with its UK-based business process outsourcing (BPO) arm Diligent for this contract. Two other global majors, IBM and Accenture, are also believed to be in the race for the contract.

The Tata group company was short-listed from a list of 22 companies from across the world. The negotiations have commenced, and Prudential Insurance is expected to announce the winner by July this year, the sources said.

TCS officials declined to comment, stating that the company does not react to market speculation. If the deal is completed, it would significantly increase the revenue of TCS from the UK.

For the financial year 2006-07, the company's revenues from Europe crossed $1 billion. Diligent is the BPO arm of TCS that was created a year back to do processing and administrative work for the London-based Pearl Group.

According to industry analysts, the Prudential deal could be one of the biggest in the country, not only in the financial and IT services outsourcing space, but also in the infrastructure and network outsourcing sectors. TCS had earlier bagged a $800 million deal from the UK-based Pearl Group, which is considered the single biggest in the Indian financial outsourcing segment.

Earlier, a consortium of Indian firms - TCS, Infosys and Wipro - had bagged a $1.3 billion outsourcing deal from the banking major ABN Amro.

Prudential is one of the leading life and pensions provider in the UK and services over seven million customers.

The company also owns a subsidiary in the US - Jackson National Life - and has over three million policies and contracts in force.

The share prices of TCS closed at Rs 1,248.30 on the BSE, up 1.95 per cent from the previous closing price of Rs 1,224.40 a share.