Aditya Birla Minacs plans KPO acquisition
SOURCE: Business Standard
DATE: June 19th, 2008
Mohit Soapbox:
Aditya Birla Minacs is an interesting company. It is one of the larger firms in terms of BPO revenues but I believe can do a better job in creating a better brand awareness and mind share with the customers in US/UK. The firm has been a primarily voice based BPO and has diversified into non voice capabilities but very few clients I work with will put this company on a short list. Given that it has a strong backer, will be interesting to see how they continue to evolve. If I recall the firm also lost money in the last quarter based on currency fluctuation. With the ‘old’ business houses going global and having an ambitous plan to grow their scale, very few of these firms seem to have suceeded in building a larger ITES/BPO presence. Most of the ventures of these firms seem to be an ancillary business but have not scaled to a level where it will make a dent in the business. This firm seems to have a good story and can hopefull create a global footprint and brand
ARTICLE
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 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.
The BPO firm is also expanding its business in geographies like the Philippines, Latin America, Eastern Europe and India. Bhattacharya said, “Most of these geographies are a growth opportunity for us rather than for near-shore capability.” For instance, Latin America will allow the company to target business opportunity in Hispanic countries, whereas, Eastern Europe will give the company capability in multi-lingual operations.
It is also increasing its focus in the domestic market. In the next 12 months, the firm will set up at least one centre each in the southern and eastern parts of India. Currently, India contributes 4-5 per cent to the company’s revenue.
But going ahead, Bhattacharya expects this business to grow in the range of 40-50 per cent. It has five centres in India: Banglaore (3), Mumbai (1) and Baroda (1).
The company employs around 13,000 people and plans to add another 2,000-2,500 by the next year.
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