New Delhi: Private equity funds, hitherto unregulated, are set to come under Sebi regulations. The market regulator has already started work on regulating private equity players and guidelines would be issued shortly, economic affairs secretary R Gopalan said.
He said the regulations would be on the lines of venture capital funds, which are also regulated by the Securities & Exchange Board of India.
The venture capital regulation requires mandatory registration with Sebi and enjoys the status of a qualified institutional buyer. The proposed regulations from Sebi come at a time when internationally, there are concerns over private pools of capital such as private equity. In fact, in the past, RBI had also talked about regulating private equity. It has already spoken of tightening the norms for bank-sponsored funds.
Regulatory concerns increased following the global financial crisis as private equity and hedge funds were seen to be lacking transparency.
Even before the 2008 financial crisis, multilateral bodies such as International Monetary Fund and the OECD had expressed concern, especially regarding leverage.
In India, over the years, private equity has gained in significance as they invest in smaller companies and exit when they gain in size, often at a hefty premium to their investment value.
Venture intelligence data shows that private equity investment in the country rose 57% to $3.3 billion during January-March 2011. The inflows come on the back of nearly $9 billion invested by PE funds in Indian markets in 2010.
In contrast, foreign institutional investors (FIIs) bought $1.3 billion worth of Indian equities in March, after selling $2.2 billion in January and February, translating into net outflows of $900 million during the first quarter of the current financial year.
The guidelines would also help clarify some of the concerns that private equity investors have while investing in India.
Inset:
The government is going to soon start work on converting physical assets owned by Indian households into financial assets.
While India enjoys high savings rate, estimated at 35%, a McKinsey study had found that less than half that amount goes into financial assets such as fixed deposits and equities.
In fact, in 2008 (the latest period for which data was collated), real estate was the most preferred investment option with 35% of the savings finding its way into this asset class followed by currency (7%) and gold (5%). Among financial assets, deposits were the most preferred option (18%), followed by insurance (12%).
Economic affairs secretary R Gopalan said at a CII conference on Saturday that the government was taking up the task of encouraging individuals to invest in financial assets.
Success in my Habit
Wednesday, April 20, 2011
New Telecom policy to ease M&A rules
New Delhi: The existing stringent merger and acquisition rules will be eased in the new telecom policy that will be in place by the year-end, communication minister Kapil Sibal said on Monday. The move is aimed at bringing in much-needed consolidation in the hyper-competitive 14-player telecom market. Sibal did not divulge details regarding the relaxation of M&A rules.
"But, the number of competitors should not be allowed to fall below six in each circle," he said. Sibal said telecom licences should be renewed for 10 years compared with 20 years currently, and said companies must submit applications for new permits at least 30 months prior to the expiry of their licences.
At present, telcos hold separate permits for each of the 22 circles in the country and these are valid for a period of 20 years. The government gave away mobile permits from mid-90s. About 11 mobile phone companies will have to renew their permits between 2014 and 2021. Reiterating his earlier announcement, Sibal said the new policy would also de-link the allocation of telecom licences from mobile spectrum. Currently, mobile permits come bundled with start-up airwaves.
The minister also proposed a series of reforms to address all issues related to airwaves, including the formulation of a National Spectrum Act to govern all allocations of this scarce resource. Retired Supreme Court Judge Shivraj Patil will head the committee to draft this Act, he added.
Spectrum is at the centre of almost all the controversies in India's telecoms industry.
"By separating spectrum from licence, spectrum is no longer the bottleneck for someone to enter in the industry and offer services. In terms of pricing, ideally spectrum should be auctioned. The National Spectrum Act would have to refine the entire spectrum allocation, valuation and pricing process. But they must keep in mind that there are existing players that have invested huge monies. It will be a balancing act." Analysys Mason India director Kunal Bajaj said.
External agencies, such as private auditors, the comptroller auditor general of India, better known as CAG, or even the telecom regulator TRAI, to do regular audits of spectrum usage by the industry, Sibal said, and added that other proposals such as sharing of radio frequencies amongst operators were also likely to be part of the new policy.
The minister also emphasized that the government will ask telcos to pay for spectrum based on a market-driven mechanism, an indication that the telecoms department (DoT) will implement regulator's Trai's latest recommendations and ask GSM telcos to pay for all 'excess' airwaves they hold on a retrospective basis.
"But, the number of competitors should not be allowed to fall below six in each circle," he said. Sibal said telecom licences should be renewed for 10 years compared with 20 years currently, and said companies must submit applications for new permits at least 30 months prior to the expiry of their licences.
At present, telcos hold separate permits for each of the 22 circles in the country and these are valid for a period of 20 years. The government gave away mobile permits from mid-90s. About 11 mobile phone companies will have to renew their permits between 2014 and 2021. Reiterating his earlier announcement, Sibal said the new policy would also de-link the allocation of telecom licences from mobile spectrum. Currently, mobile permits come bundled with start-up airwaves.
The minister also proposed a series of reforms to address all issues related to airwaves, including the formulation of a National Spectrum Act to govern all allocations of this scarce resource. Retired Supreme Court Judge Shivraj Patil will head the committee to draft this Act, he added.
Spectrum is at the centre of almost all the controversies in India's telecoms industry.
"By separating spectrum from licence, spectrum is no longer the bottleneck for someone to enter in the industry and offer services. In terms of pricing, ideally spectrum should be auctioned. The National Spectrum Act would have to refine the entire spectrum allocation, valuation and pricing process. But they must keep in mind that there are existing players that have invested huge monies. It will be a balancing act." Analysys Mason India director Kunal Bajaj said.
External agencies, such as private auditors, the comptroller auditor general of India, better known as CAG, or even the telecom regulator TRAI, to do regular audits of spectrum usage by the industry, Sibal said, and added that other proposals such as sharing of radio frequencies amongst operators were also likely to be part of the new policy.
The minister also emphasized that the government will ask telcos to pay for spectrum based on a market-driven mechanism, an indication that the telecoms department (DoT) will implement regulator's Trai's latest recommendations and ask GSM telcos to pay for all 'excess' airwaves they hold on a retrospective basis.
Thursday, April 7, 2011
India offers a huge business potential, says Buffett
Bangalore: For a man who does not like to look back in life, India, though a missed opportunity, still offers a huge potential. For Mr Warren E. Buffett, Chairman, Berkshire Hathaway, India is a country which is on the move.
In what could be indicative of possible investments from the octogenarian-billionaire, he told a gathering of top-notch corporate leaders that Berkshire Hathaway was always available for big-ticket investments. “At some point in the next six months or two years or five years, when some large Indian corporation looks for a permanent new home, and believes that Berkshire Hathaway is the best place in the world,” it is important “they don't forget me”, emphasised Mr Buffett, addressing an interactive session organised by the Confederation of Indian Industry.
Mr Buffet who is visiting India for the first time, said, “India is a very big country with large number of very significant businesses. There should be all kinds of opportunities for many of the Berkshire companies to participate in India.” In fact, in the last 48 hours he has even openly admitted of being a late entrant to India, indicating that there could have been missed opportunities.
Not willing to miss out on the country's potential in the future, Mr Buffett fielded questions from corporate leaders like Mr S. Gopalakrishnan, CEO and Managing Director, Infosys Technologies; Mr Vikram Kirloskar, Vice-Chairman, Toyota Kirloskar; Mr Raju, Managing Director, GMR Infrastructure, even as he urged them to pledge for philanthropy.
On the prospects for India and China, Mr Buffett said that both these countries were now working smarter and exploding in terms of opening up human potential. “It's not as if these countries are working harder than before, just that they are working smarter and responding to the needs of their societies,” he added.
Mr Buffett told the attentive and visibly excited audience that he was enormously lucky as a person, “with the right sort of wiring” that worked really well in a capitalistic society like the US, which was a “wonderful place to be born in”. He said that he got the right opportunities in life, better compared with his two sisters', and exposed as he was to “extraordinary human beings”.
“Personally I would much prefer not to be born rich,” he said but would like to be born with ‘certain talents' which are useful to the society so that he could lead a good life.
“Never have my heroes let me down,” he said, adding that his father and his first wife were his biggest influences in life.
In what could be indicative of possible investments from the octogenarian-billionaire, he told a gathering of top-notch corporate leaders that Berkshire Hathaway was always available for big-ticket investments. “At some point in the next six months or two years or five years, when some large Indian corporation looks for a permanent new home, and believes that Berkshire Hathaway is the best place in the world,” it is important “they don't forget me”, emphasised Mr Buffett, addressing an interactive session organised by the Confederation of Indian Industry.
Mr Buffet who is visiting India for the first time, said, “India is a very big country with large number of very significant businesses. There should be all kinds of opportunities for many of the Berkshire companies to participate in India.” In fact, in the last 48 hours he has even openly admitted of being a late entrant to India, indicating that there could have been missed opportunities.
Not willing to miss out on the country's potential in the future, Mr Buffett fielded questions from corporate leaders like Mr S. Gopalakrishnan, CEO and Managing Director, Infosys Technologies; Mr Vikram Kirloskar, Vice-Chairman, Toyota Kirloskar; Mr Raju, Managing Director, GMR Infrastructure, even as he urged them to pledge for philanthropy.
On the prospects for India and China, Mr Buffett said that both these countries were now working smarter and exploding in terms of opening up human potential. “It's not as if these countries are working harder than before, just that they are working smarter and responding to the needs of their societies,” he added.
Mr Buffett told the attentive and visibly excited audience that he was enormously lucky as a person, “with the right sort of wiring” that worked really well in a capitalistic society like the US, which was a “wonderful place to be born in”. He said that he got the right opportunities in life, better compared with his two sisters', and exposed as he was to “extraordinary human beings”.
“Personally I would much prefer not to be born rich,” he said but would like to be born with ‘certain talents' which are useful to the society so that he could lead a good life.
“Never have my heroes let me down,” he said, adding that his father and his first wife were his biggest influences in life.
TCS, Cognizant, Infosys, Wipro and HCL Technologies on hiring overdrive
Chennai: The hiring numbers of IT majors leave nothing to doubt about how far the companies have left behind the recession.
From the quarter ended March 31, 2010 to the one ended December 31, 2010, the top 5 IT majors in India--Tata Consultancy Services (TCS), Cognizant , Infosys , Wipro and HCL Technologies .-together clocked a staggering figure of 1,14,038 net additions in terms of headcount. This stands in sharp contrast to the net addition figure of 47,462 in the corresponding year ago period.
Net addition subtracts the number of people leaving the company from the gross additions, and, therefore, is a better indicator of the actual increase in staff numbers.
"It reflects the buoyancy in the market. 2009 numbers show the uncertainty and the low sentiments prevailing at that point. Companies are feeling a lot more confident now and can afford some redundancy in anticipation of big projects which wasn't the case earlier," said E Balaji, MD and CEO, MaFoi Randstad, a HR consulting firm.
The numbers have shown a marked increase for each of the big IT companies. The net addition of TCS for the period from March quarter to the December quarter in 2010 was 37,260 which is almost double the figure of 19,311 clocked in the year ago.
Cognizant's net addition numbers increased from 16,700 in 2009 to 25,557 in 2010. Much bigger increases were seen for the other 3 IT majors-Infosys, Wipro and HCL Technologies. The same numbers for Wipro for instance, increased from 3,977 in 2009 to 16,745 in 2010; for HCL Tech, the number rose from 670 to 16,579; and for Infosys, from 6,804 to 17,897.
"During recession, companies weren't recruiting freshers. So there was a deficit, especially at lower levels. So what is happening now is that companies are replenishing the stock, with freshers accounting for a big part of it. The higher attrition in the current buoyant mood in the market is also playing a role in increasing these hiring numbers," said Amitabh Das, CEO of Vati Consulting , a recruitment firm.
Not only are the companies compensating for the lull in hiring, they also anticipate bigger and more valuable projects in the coming times. They are building up bench strengths to handle the bigger size and variety of projects they expect to come their way.
From the quarter ended March 31, 2010 to the one ended December 31, 2010, the top 5 IT majors in India--Tata Consultancy Services (TCS), Cognizant , Infosys , Wipro and HCL Technologies .-together clocked a staggering figure of 1,14,038 net additions in terms of headcount. This stands in sharp contrast to the net addition figure of 47,462 in the corresponding year ago period.
Net addition subtracts the number of people leaving the company from the gross additions, and, therefore, is a better indicator of the actual increase in staff numbers.
"It reflects the buoyancy in the market. 2009 numbers show the uncertainty and the low sentiments prevailing at that point. Companies are feeling a lot more confident now and can afford some redundancy in anticipation of big projects which wasn't the case earlier," said E Balaji, MD and CEO, MaFoi Randstad, a HR consulting firm.
The numbers have shown a marked increase for each of the big IT companies. The net addition of TCS for the period from March quarter to the December quarter in 2010 was 37,260 which is almost double the figure of 19,311 clocked in the year ago.
Cognizant's net addition numbers increased from 16,700 in 2009 to 25,557 in 2010. Much bigger increases were seen for the other 3 IT majors-Infosys, Wipro and HCL Technologies. The same numbers for Wipro for instance, increased from 3,977 in 2009 to 16,745 in 2010; for HCL Tech, the number rose from 670 to 16,579; and for Infosys, from 6,804 to 17,897.
"During recession, companies weren't recruiting freshers. So there was a deficit, especially at lower levels. So what is happening now is that companies are replenishing the stock, with freshers accounting for a big part of it. The higher attrition in the current buoyant mood in the market is also playing a role in increasing these hiring numbers," said Amitabh Das, CEO of Vati Consulting , a recruitment firm.
Not only are the companies compensating for the lull in hiring, they also anticipate bigger and more valuable projects in the coming times. They are building up bench strengths to handle the bigger size and variety of projects they expect to come their way.
Mobile VAS to clock Rs 55,000 cr in sales by 2015
New Delhi: Mobile value-added services will generate Rs 55,000 crore in sales by 2015, more than double the Rs 18,000-crore figure currently, consulting firm PricewaterhouseCoopers said in a report. The present student community will be the largest consumers of value-added services in the next four years, the study revealed.
It also adds that new the new generation of content users will demand more entertainment and utility-based services. As students become tomorrow's working class, capable of high income & high propensity to pay, they are likely to generate incremental revenue of Rs 14,677 crore in 2015.
The consulting firm had sampled 1,050 respondents across Delhi , Mumbai , Hyderabad, Bangalore, Chennai , Bhubaneswar, Kochi, Ahmedabad , Pune and Kolkata , for its study. PwC projects the working population to make up around 50% of the subscriber base, which is expected to be around 1.2 billion in 2015, therefore increasing revenue flows.
Entertainment services such as live sports, music, regional language content and Bollywood movies will be adopted by masses because people are most willing to pay for entertainment services compared to all other categories of VAS. The survey focuses on 30 value services across entertainment, information, communication and m-commerce points out multilingual content, application support around languages, killer applications and readiness of handsets could drive in a very high quantum of revenues from VAS.
But to tap this opportunity, mobile operators, content creators and handset manufacturers will have to collaborate to create a large array or services for a market driven by localised content, it adds. As these different stakeholders collaborate and compete for the same pie-share, the industry will witness tectonic changes, says PwC India executive director consulting Sivarama Krishnan.
Essential medical services on VAS could open up another opportunity after mobile banking for content creators and mobile operators. Medical advice VAS has the capability to allow the deprived sections of society to access quality medical advice at an affordable price. Issues related to ease of use and data privacy would have to be taken into consideration to make these services effective revenue streams, the report adds.
The survey also highlights how most Indian mobile operators would have to increasingly rely on VAS, which will drive up revenues. Mobile tariffs in India are one of the lowest in the world and hyper-competition will not allow them to rise in near future. These operators are adding more customers from rural India. However, minutes of usage per subscribers and ARPU , are falling quarter-on-quarter due to lower paying capacity and usage patterns.
It also adds that new the new generation of content users will demand more entertainment and utility-based services. As students become tomorrow's working class, capable of high income & high propensity to pay, they are likely to generate incremental revenue of Rs 14,677 crore in 2015.
The consulting firm had sampled 1,050 respondents across Delhi , Mumbai , Hyderabad, Bangalore, Chennai , Bhubaneswar, Kochi, Ahmedabad , Pune and Kolkata , for its study. PwC projects the working population to make up around 50% of the subscriber base, which is expected to be around 1.2 billion in 2015, therefore increasing revenue flows.
Entertainment services such as live sports, music, regional language content and Bollywood movies will be adopted by masses because people are most willing to pay for entertainment services compared to all other categories of VAS. The survey focuses on 30 value services across entertainment, information, communication and m-commerce points out multilingual content, application support around languages, killer applications and readiness of handsets could drive in a very high quantum of revenues from VAS.
But to tap this opportunity, mobile operators, content creators and handset manufacturers will have to collaborate to create a large array or services for a market driven by localised content, it adds. As these different stakeholders collaborate and compete for the same pie-share, the industry will witness tectonic changes, says PwC India executive director consulting Sivarama Krishnan.
Essential medical services on VAS could open up another opportunity after mobile banking for content creators and mobile operators. Medical advice VAS has the capability to allow the deprived sections of society to access quality medical advice at an affordable price. Issues related to ease of use and data privacy would have to be taken into consideration to make these services effective revenue streams, the report adds.
The survey also highlights how most Indian mobile operators would have to increasingly rely on VAS, which will drive up revenues. Mobile tariffs in India are one of the lowest in the world and hyper-competition will not allow them to rise in near future. These operators are adding more customers from rural India. However, minutes of usage per subscribers and ARPU , are falling quarter-on-quarter due to lower paying capacity and usage patterns.
New FDI policy spells relief for private equity industry
Mumbai: In what comes as relief for the private equity industry, the foreign direct investment (FDI) policy unveiled by the Department of Industrial Policy and Promotion (DIPP) on Thursday brought out a clear picture on convertible instrument prices.
DIPP said companies would now have the option of prescribing a conversion formula, instead of specifying the price of convertible instruments. Last year’s policy, which said the conversion ratio should be specified upfront, led to a delay in the flow of private equity deals, in which most of the prices of convertible instruments were decided during conversion, not upfront.
Convertible instruments offer an investor the choice of whether or not to convert on a specified future date. The instruments include compulsory convertible preference shares (CCPS) and compulsory convertible debentures (CCDs).
According to the DIPP circular, “Instead of specifying the price of convertible instruments upfront, companies will now have the option of prescribing a conversion formula, subject to the Foreign Exchange Management Act and Securities and Exchange Board of India guidelines on pricing. This would help the recipient companies obtain better valuations, based on their performance.”
In January, Business Standard had reported that private equity/venture capital deals routed through CCPS or CCDs were delayed due to the ambiguity over the new policy introduced last year.
Mayank Rastogi, partner (private equity), Ernst & Young, said, “In a scenario in which the instrument is issued with a determined ‘conversion formula’, the actual conversion price should not be lower than the price worked out according to the relevant guidelines at the time of ‘issuance’ of the instrument.” As a result, a rise in performance would enable Indian companies to issue shares at a higher conversion price, thus benefiting the company and the promoters. On the other hand, if there is a decrease in the valuation, foreign investors will not benefit as much, since the conversion price will be locked on the minimum price determined, based on the discounted cash flow (DCF) at the time of issuing the convertible instrument, Rastogi said.
According to the DIPP and the commerce ministry circular dated March 31, 2010, the pricing of all convertible instruments issued to offshore investors must be carried out at the time of issuance, without leaving any room for adjustment at the time of conversion. This would be applicable even if the pricing complies with the applicable pricing guidelines.
Roshan Thomas, partner, Lexygen, said, “There was an ambiguity regarding the requirement of determining an ‘upfront price’ for convertible instruments and whether it meant a numerical conversion price had to be agreed upon, or whether a conversion formula would suffice. As convertible securities are probably the most efficient method to affect valuation adjustments, this would be a welcome move for the investment community...Thursday, DIPP has clarified that the parties are free to either agree on a numerical price or a conversion formula, as long as the price at which the conversion takes place is not less than the floor price prescribed by RBI’s pricing guidelines,” he added.
“While there have been a few deals over the course of last year that involved convertible securities, the risk that regulators saw in numerical conversion prices being fixed upfront, had led to waning interest in convertible securities. This clarification will now help provide valuation adjustments in an uncomplicated, logical, transparent, and enforceable manner, ” Thomas said.
DIPP said companies would now have the option of prescribing a conversion formula, instead of specifying the price of convertible instruments. Last year’s policy, which said the conversion ratio should be specified upfront, led to a delay in the flow of private equity deals, in which most of the prices of convertible instruments were decided during conversion, not upfront.
Convertible instruments offer an investor the choice of whether or not to convert on a specified future date. The instruments include compulsory convertible preference shares (CCPS) and compulsory convertible debentures (CCDs).
According to the DIPP circular, “Instead of specifying the price of convertible instruments upfront, companies will now have the option of prescribing a conversion formula, subject to the Foreign Exchange Management Act and Securities and Exchange Board of India guidelines on pricing. This would help the recipient companies obtain better valuations, based on their performance.”
In January, Business Standard had reported that private equity/venture capital deals routed through CCPS or CCDs were delayed due to the ambiguity over the new policy introduced last year.
Mayank Rastogi, partner (private equity), Ernst & Young, said, “In a scenario in which the instrument is issued with a determined ‘conversion formula’, the actual conversion price should not be lower than the price worked out according to the relevant guidelines at the time of ‘issuance’ of the instrument.” As a result, a rise in performance would enable Indian companies to issue shares at a higher conversion price, thus benefiting the company and the promoters. On the other hand, if there is a decrease in the valuation, foreign investors will not benefit as much, since the conversion price will be locked on the minimum price determined, based on the discounted cash flow (DCF) at the time of issuing the convertible instrument, Rastogi said.
According to the DIPP and the commerce ministry circular dated March 31, 2010, the pricing of all convertible instruments issued to offshore investors must be carried out at the time of issuance, without leaving any room for adjustment at the time of conversion. This would be applicable even if the pricing complies with the applicable pricing guidelines.
Roshan Thomas, partner, Lexygen, said, “There was an ambiguity regarding the requirement of determining an ‘upfront price’ for convertible instruments and whether it meant a numerical conversion price had to be agreed upon, or whether a conversion formula would suffice. As convertible securities are probably the most efficient method to affect valuation adjustments, this would be a welcome move for the investment community...Thursday, DIPP has clarified that the parties are free to either agree on a numerical price or a conversion formula, as long as the price at which the conversion takes place is not less than the floor price prescribed by RBI’s pricing guidelines,” he added.
“While there have been a few deals over the course of last year that involved convertible securities, the risk that regulators saw in numerical conversion prices being fixed upfront, had led to waning interest in convertible securities. This clarification will now help provide valuation adjustments in an uncomplicated, logical, transparent, and enforceable manner, ” Thomas said.
LinkedIn and Facebook: Personal Vs. Professional in the Identity Wars
LinkedIn has launched a series of website plugins that effectively duplicate the features of the 'open graph' platform Facebook launched last year -- a move that throws the business-oriented network into what looks like head-to-head competition with Facebook for the clicks and identities of web users
Microsoft, Toyota team up on digital auto network
Microsoft Corp and Toyota Motor Corp unveiled a plan on Wednesday to work together on bringing Internet-connected services to Toyota's cars across the world.
The world's biggest software company and the biggest automaker said they were investing about $12 million (1 billion yen) in Toyota Media Service Co, a Toyota unit that handles its digital offerings for customers.
Toyota is planning to set up a network based on Microsoft's Azure 'cloud computing' platform by 2015, which would allow customers across the world access to Toyota's digital services, such as GPS, multimedia, and managing power on electric and hybrid vehicles.
The world's biggest software company and the biggest automaker said they were investing about $12 million (1 billion yen) in Toyota Media Service Co, a Toyota unit that handles its digital offerings for customers.
Toyota is planning to set up a network based on Microsoft's Azure 'cloud computing' platform by 2015, which would allow customers across the world access to Toyota's digital services, such as GPS, multimedia, and managing power on electric and hybrid vehicles.
Apple bucks trend and is doing well in China
Nice piece from San Jose Mercury News:
Not far from the massive glass cylinder and spiral staircase that lead to Apple’s always crowded underground store in the heart of Shanghai’s gleaming financial center of high rises and high-end stores is a shuttered Best Buy. Home Depot has retreated as well, closing a number of outlets as its successful American strategy sputtered in this emerging economic giant. Mattel recently abandoned its flagship Barbie store in this metropolis of 19 million people.
Apple is bucking that trend.
Not far from the massive glass cylinder and spiral staircase that lead to Apple’s always crowded underground store in the heart of Shanghai’s gleaming financial center of high rises and high-end stores is a shuttered Best Buy. Home Depot has retreated as well, closing a number of outlets as its successful American strategy sputtered in this emerging economic giant. Mattel recently abandoned its flagship Barbie store in this metropolis of 19 million people.
Apple is bucking that trend.
Genpact to acquire Headstrong for $550m
Outsourcing giant Genpact said it will acquire consulting and IT services firm Headstrong Corporation for a cash consideration of $ 550 million.The transaction is being funded by a combination of existing cash and acquisition financing, and is expected to close by May 31, 2011, subject to customary regulatory and other conditions, Genpact said in a statement.
Genpact expects the transaction to be accretive to earnings per share on a GAAP basis in 2011.
'Headstrong is a complementary high-growth business, built by talented leaders, that is an excellent fit strategically, financially, operationally and culturally. With this acquisition, we are gaining critical domain and technology expertise in the complex, but highly attractive, capital markets industry vertical,' Genpact President and CEO Pramod Bhasin said.
This expertise - combined with capabilities in business process management (BPM) and Smart Decision Services that encompass analytics and reengineering -- will create a uniquely powerful value proposition for clients, he added.
Headstrong has domain expertise in several segments of the capital markets vertical like asset management, derivatives, wealth management, prime brokerage, reference data, compliance and mortgages.
With a strong mix of onsite and offshore expertise, Headstrong counts nine of the world's top 10 investment banks and three of the top five asset managers as clients.
Genpact expects the transaction to be accretive to earnings per share on a GAAP basis in 2011.
'Headstrong is a complementary high-growth business, built by talented leaders, that is an excellent fit strategically, financially, operationally and culturally. With this acquisition, we are gaining critical domain and technology expertise in the complex, but highly attractive, capital markets industry vertical,' Genpact President and CEO Pramod Bhasin said.
This expertise - combined with capabilities in business process management (BPM) and Smart Decision Services that encompass analytics and reengineering -- will create a uniquely powerful value proposition for clients, he added.
Headstrong has domain expertise in several segments of the capital markets vertical like asset management, derivatives, wealth management, prime brokerage, reference data, compliance and mortgages.
With a strong mix of onsite and offshore expertise, Headstrong counts nine of the world's top 10 investment banks and three of the top five asset managers as clients.
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