Mumbai, July 13: Housing Development and Finance Corporation (HDFC) is planning to buy out its joint-venture partner, Tata Consultancy Services’ (TCS) 50 per cent stake in Intelenet Global Services.
According to sources, following intense negotiations it has been decided that TCS will exit Intelenet.
An HDFC spokesperson, however, denied the development. “Nothing has been decided on this.”
TCS officials also declined to comment in view of the silent period. “No deal has been done. We have been discussing,” said the spokesperson.
Intelenet was set up to service international business process outsourcing clients. The company reported a total income of Rs 117.21 crore last year compared with Rs 21.75 crore in the previous year.
The deal is significant as it comes close to TCS’ market debut, sources said. The software firm is in the process of finalising its initial public offering.
Speculation is rife on the valuation of the Intelenet deal. According to sources, who are aware of the deal, it could be valued at five times Intelenet’s annual income. The growth potential of the venture is another criterion, which would be considered as the BPO outfit has been ramping up its operations.
Intelenet’s client roster includes Household Financials, J P Morgan, Standard Life Health Care and UK Bank.
Earlier, TCS was keen to buy 2 to 3 per cent additional equity in the venture and make Intelenet its subsidiary. It was planning to integrate the JV operations with its other BPO businesses and set up a common front by having joint sales and marketing team.
However, the TCS offer to buy out a portion of its joint-venture partner’s stake was not up to the expectations of HDFC, which then made a counter offer.
TCS has aggressively acquired stakes from other joint ventures. In March, it bought out Singapore Airlines in Aviation Software Development Consultancy. Last year, it had acquired Swiss Air’s 75.1 per cent stake in Airline Financial Support Services and converted it into a wholly-owned subsidiary.
The Tata group also has a BPO outfit, Sitel India, which is a 50:50 joint venture with the US-based Sitel.
