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Temasek to invest $30 M in ICICI One Source
By siliconindia staff writer
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Monday, 02 August 2004, 19:30 IST
MUMBAI: Private equity fund Temasek Holdings, the Singapore governmentÂ’s investment arm, is close to investing $25-$30m in ICICI's BPO (Business Process Outsourcing) firm, ICICI OneSource.
According to a report in Economic Times, the firms have been in talks for over three months now, and a decision is expected sometime next week, sources said. ICICI OneSource was in dialogue with three private equity funds including Temasek and General Atlantic Partners.
The BPO intends to raise funds for business growth and expansion purposes. The investment would be through a preferential allotment of shares leading to an expansion of ICICI OneSource's existing equity.
The proportion of Temasek's shareholding after fund infusion could not be ascertained, but the fund is pushing for a higher share, sources said. This would make Temasek Holdings the second largest shareholder in ICICI OneSource after the ICICI group which now holds around 60%.
ICICI OneSource has no individual promoters. Other investors in the BPO firm are WestBridge Capital Partners with 8% stake and employees holding stock through options.
The firms are said to be in the last leg of their discussion stage and are currently evaluating protection and governance issues.
Of the total investment, a small tranche would be put in soon after the evaluation process concludes. Temasek would be entitled to two seats on ICICI OneSource's board of directors.
OneSource had revenues of $42m as of March '04 and is said to be cash positive. Its profit figures were not made available.
During July Â’03, ICICI OneSource acquired FirstRing in cash (for an undisclosed amount) after it partially bought out stakes of WestBridge Capital Partners, Hero Group and Silicon Valley-based investor Ravi Sethi in a stock swap.
The acquisition gave ICICI OneSource access to FirstRingÂ’s operations in India and the US. WestBridge Capital was a common investor for both ICICI OneSource and FirstRing. The firm also acquired CustomerAsset, another Bangalore-based BPO firm.
ICICI OneSource employs close to 3,500 people and has a seat capacity of 2,000. The firm has four centres in Bangalore and Mumbai, and a fifth one in the process of being set up in Mumbai.