Genpact IPO = blowout gains for Oakhill, General Atlantic

Genpact, India’s largest business process outsourcing firm, is looking to raise $600 million through its IPO on the New York Stock Exchange.

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MUMBAI: Genpact, India’s largest business process outsourcing firm, is looking to raise $600 million through its IPO on the New York Stock Exchange.

Although valuations details aren’t clear yet, figures of $3.5 to 5 billion are being tossed around.

At that rate, private equity firms Oakhill Capital and General Atlantic would make a killing, creating a new record for returns from Indian investments.

Just two years ago, Oakhill Capital and General Atlantic had invested $800 million for a 60% stake in Genpact.

Warburg Pincus holds the record on making the most from a single private equity investment. It invested $292 million in Bharti Airtel between September 1991 and July 2001.

Between the Bharti IPO in January 2002 and Warburg’s final exit in October 2005, the private equity firm earned $1.6 billion or 5.5 times its investment.

The Genpact float will also throw up a clutch of names joining the list of Esop millionaires, such as Pramod Bhasin, the company’s head honcho.

The Bermuda-registered firm also becomes the third India-based BPO company to float shares in the US after, EXL Services (made its offering on the Nasdaq) and WNS Holdings (floated on the NYSE).

Genpact filed its registration statement with the US Securities and Exchange Commission (SEC) on Friday. Genpact derives two-thirds of its revenues out of development centres in India.

Its public issue comprises a fresh offering as well as stake sale by existing shareholders which include General Electric and a clutch of private equity players.

It is not clear what portion of the issue would be a fresh offering.

Interestingly, Genpact shares would trade under the under the symbol ‘G’, which was earlier the symbol of Gillette Co, until it got acquired Procter & Gamble in 2005.

Genpact said it would use the net issue proceeds to repay outstanding debt and for working capital and general corporate purposes, including potential acquisitions.

According to its SEC filing, Genpacts’s debt as on March 31, 2007, stood at $133 million.

Founded in 1997 as GE International Capital Services (GECIS) by General Electric, Genpact became by far the most successful captive BPO in India, leveraging gthe country’s strength of cheap and skillful manpower.

In 2006, Genpact more than doubled its net income to $39.8 million on revenues of $613 million, of which GE contributed almost three fourths.It has a multi-year contract with GE that provides the company with committed revenues through 2013.

To get better valuations, the company has been growing its non-GE business rapidly.

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