siliconindia | | JULY 20238The banking crisis in the US and Europe could provide Indian IT firms with an opportunity to acquire captives technology units of banking and financial firms in a repeat of the 2008 financial crisis, analysts say.IT companies such as TCS, Infosys, Wipro and Cognizant had acquired parts of the captive businesses of banks including Citi, ABN Amro and UBS after the 2008 crisis. Similar opportunities are likely to come up in the second half of 2023-24, analysts told. Though some others anticipate increased investments on captive units."We expect there could be some big captive buyouts where the big services firms leverage their relatively healthy balance sheets to push forward a big win," said Elena Christopher, chief research officer at business research consultancy HfS Research.Over the last few weeks, the US has witnessed its second and third largest banking failures in history, while Swiss bank UBS had to buy out a failing Credit Suisse in Europe for over $2 billion. HfS Research expects Indian services to benefit as most of the banks have core modernisation investments to make to stay competitive as they recover from this situation. This is expected to put a stronger onus to move to an outsourcing model and away from global capability centres (GCCs) to handle operations and IT support.Kotak Securities in a report said higher focus on cost take outs among banking and financial companies amid the ongoing crisis will generate opportunities in the form of application rationalisation, higher offshoring, captive carve outs, enabling automation, and vendor consolidation, said a report.Following the financial crisis of 2008, TCS had attained Citi's India captive BPO unit for $505 million and Wipro acquired Citi's IT arm for $127 million, along with their EDITORIAL EXCLUSIVEINDIAN IT FIRMS COULD ACQUIRE TECH CAPTIVES OF CRISIS-HIT BANKING, FINANCIAL FIRMS
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