INDIA BUSINESS WORLD - 1^st JANUARY - TO - 15^th JANUARY - 2009

TCS COMPLETES CITIGROUP BPO ACQUISITION

Tata Consultancy Services (TCS) is in talks to win two large BPO contracts due to its acquisition of Citigroup's captive BPO, Citigroup Global Services (CGSL), a company official said. India's number one IT exporter also announced the completion of the CGSL transaction. The transaction is estimated at $ 512 million and includes a revenue commitment of $ 2.5 billion from Citigroup. TCS COO and executive director, N Chandrasekaran, said an integration team had been formed back in October so as not to lose time. "We will hit the ground running in terms of sales efforts. We're not going to be reporting only CGSL numbers... Our game is all about integration," he said. Along with CGSL, TCS BPO will now have around 20,000 employees and the firm expects an annual run rate of $ 600 million in BPO revenues. The two possible BPO contracts are potential multimillion multi-year contracts. Mr Chandrasekaran said the deals would be "noteworthy" if TCS managed to close them. Through the acquisition of CGSL, TCS has obtained end-to-end financial processing and capability to run core-banking processes. On the challenging business environment, Mr Chandrasekaran said certain clients were not growing but other deals were getting closed and the deal pipeline's good. "In this market, you should expect pricing pressure. But we are being very disciplined about margins," he said.