Corporate Valuation in Indian BPO Sector


In the arena of Mergers & Acquisitions there are two major considerations from the acquiring company’s viewpoint – fundamentals of the company being acquired and price of acquisition – where price is just an externality. The acquisition of overvalued companies is justifiable by reasons which are more strategic than financial in nature.


The good times for ITES valuation may be coming to an end. During the period 2000-01 the ITES sector has been enjoying high post-investment valuations. The post-investment valuation of some ITES companies like Spectramind, Daksh eServices and CustomerAsset have been to the tune of over two times the revenues.





Wipro had invested $10 million for a 24 percent stake in Spectramind while its revenue was around $20 million. Similarly ICICI bought over CustomerAsset for $19.5 million, twice the revenues of CustomerAsset. But, with increasing competition in this sector valuations would dip as compared to the initial stages. Amul Gogna, former Executive Director (ICRA) had said in a press release way back in 2002 that the up-trend of high levels of post-investment valuations in the ITES sector would last for another six to nine months. In line with ICRA, VCs like Infinity Ventures and Baring Private Equity Partners (I) Limited also believed that the high post money valuations of the ITES companies would not last long. A similar trend was observed in the software industry as well which peaked off with passing time.

Following Wipro’s acquisition of Spectramind at over 2.5 times forward revenue, deals were hinged around 1-1.5 times forward revenue, the only exception being IBM-Daksh deal which commanded a higher premium. Analysts and industry experts were not ready to accept this deal as a benchmark for future valuations in Indian BPO sector. Though the IBM deal further endorsed India as an offshore destination for outsourcing, it did not imply that valuations of BPO companies will move up. Susir Kumar, CEO (Intelenet) feels Indian companies will command a premium only if they have either reached scalability or have a niche expertise. According to him, "Strategic buyers like IBM will pay a premium but it can't be used as a benchmark for valuation of deals from a private equity investment point of view".

In 2007-08 there were further adjustments in valuations made by the private equity investors owing to the strengthening rupee against US$; on top of that there was a continuing concern for attrition in the BPO sector. Though there was feeling among the PE investors that the interest in the BPO sector still existed, the rising rupee had impacted their profitability. But, the valuations have changed. "The rising rupee and the sub-prime crisis will affect the mood of investors in a big way," said Raju Venkatraman, Joint MD and COO, Firstsource.

Valuations, at any given time, reflect the company's profitability and growth. Since there are not too many large players left and the predominant objective of PE investors had been higher scales, therefore there are not many choices left. According to industry estimates (2007) at least 10 of the top 15 third party BPO companies have received PE backing in one form or the other.

Around 65% of the Indian BPO companies are captive units whereas 35% are third-party. The industry outlook says that there would be more Management Buyouts (MBO) in the captive BPO segment as many large companies are exiting from their non-core businesses. The acquisition of Citi’s Indian BPO arm by TCS is an example of it. PE players also expect the tick size of MBOs to increase progressively.

(Contributed by: Financionomics, Guest columnist: Mr. Anirban Dutta)




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How to add Twitter (Retweet) Button


How to add social book marking icons in your blog so that visitors can easily using different web provided services. There are several badges that you can easily put on your blogger posts like Digg, Yahoo! Buzz, Stumble Upon, Mixx, Twitter etc. Thing is that am going to teach you in a tutorial session how to add a Twitter or Retweet badges to your blogger blog posts. Generally, we can use Twitter badges to promote our blog or increase our decent visitor’s traffic, for that reason you can use Twitter to promote your blog.



If someone really likes your blog post, she/he can click on the Retweet badges to post the topic with its URL in his twitter account and all his followers would get automatically informed about this. This is the simple yet impressive way to promote your blog posts on twitter. Generally, there are two types of Retweet badges obtainable to insert in your blogger posts. One is the most common sized and another one is the small sized. Look at the below

Login to your blogger dashboard.

Navigate to Layout >> Edit HTML >> Expand Widget Templates
Search for and paste the following codes just before or after it. Adding the code before will show the Retweet badges on the top of your post while adding after will show the Rettweet button on the bottom of your post.
For Digg like Button, use the following code.

How to Add Twitter (Retweet) Badges to Blogger Posts



Retweet this button on every post blogger


Use these codes For Compact sized button




You are done now. Now all your blogger posts will have a Twitter button or Retweet button.




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Are you ready to blog?


Before introduction on starting about how to write a blog and which post will benefit for you or you should write it? The foremost thing is that you need to know the purpose of your blog, whether it is for business to create profit or as personal diary for fun.

This one is most vital point before create any blog, whatever you are going to post or write it you should have full depth knowledge and expressive words, and most important passionate about.

Purpose to create a blog

Before start writing for your blog you should fully concerned about your blog post, as I asked it I mine introduction section that purpose of blog should be transparent to the visitors and first of all you, until and unless if you cannot find the answer of purpose behind creating a blog it will not all fruitful, it just being wothles,,, Not only you need a purpose but you have also gain the full knowledge and passion whatever you going to write.

Two successful key of blogging: Knowledge and Passion

If you don't have depth knowledge and passion about blogging your blog is not work up to mark and get failed, most prominent element required to stat a blogging is knowledge and potential writing. When you start blogging you need to continue your writing, even when you hit a down period and don't feel as though you have anything to contribute.

Check your knowledge test: Take a pen and paper and state writing an article on topic whatever you have an idea and your deep thoughts with a unique title, just check yourself that you are able to create at least 20 to 25 articles ideas in about 10 or 15 minutes. It would be help to think about various topics that will be the best think...

Check your passion test: As per passion related issue just ask yourself some questions related topics – That do you think about this topic every day? Multiple times per day? Are you chatting with your friends about this topic? Can you talk about it for hours? Do you potentially search out new information on your topic or actively bring it up in conversations? If all the answer will be YES that would be helping to creating a passion in your blog.



How many topics should you write about?

Just give one main theme to your blog. Visitors are like to read related topics on the same site for that reason it is best to concentrate or focus on one topic or a set of related topics. On Debt Solution I focus on "personal finance and other debt related" topics. These aren’t closely the same topic, but they are related closely enough that it makes sense to combine the topics. It will be definitely easier to grow you blog in terms of visitors and traffic if readers know what to expect.

On which topics you should write?

You are the only can answer that question. My suggestions are to brainstorm, go for knowledge and passion test drive, then start off with the topic in which you have interest and fully knowledge. Sometimes it may be tempting to try and start 10 blogs at once because that time you have the passion for those particular topics, but if you want to make yourself as successful try to concentrate on a particular blog to begin with. Most people realized the commitment of time value and strength of learning.

What about money? Less bothered, Have you noticed that I didn’t come up money matters yet! The only reason money shouldn’t motive into why you want to start a blogging. If you have the passion of writing in your blog which will help to get readers and traffic, And with those two vital elements, you can start thinking about making money with your blog.




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How To Modify Your Own Loan



Because of these financial crises we are in right now, most homeowners will not be able to refinance due to loss of equity in their home as well as many other factors. Therefore, if you are currently in foreclosure, or know someone in foreclosure, your best bet is to negotiate your loan. However, you should know the right methods of action when trying to modify your own loan.



There are a lot of borrowers out there who do not know how to get the right person on the phone. If this is you and are facing this situation, you will need to do two things. You should hire an attorney who specializes in foreclosures and loan modifications, or you will need to do some fast research and try to do it on your own if you cannot afford an attorney.

One solution that you can turn to is use a Loan Modification company that actually attorneys on staff that will get your situation resolved in a timely manner. Doing this will help you keeping your home, reduce your mortgage. However, there are a certain criteria that you will need to pass in order to get sufficient help. You will need to be careful, as some firms will take your money even if you don't qualify. You will need to find a company that has success and an attorney on staff.

Real estate attorneys understand how to speak the language of law jargon. Therefore, they will know how to get your lender to negotiate.




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