Wipro wins $500-mn contract from Citi

Software exporter Wipro Ltd is understood to have secured a large information technology (IT) outsourcing contract worth around $500 million (Rs 2,940 crore) from US-based financial services company Citigroup. The tenure of the contract is five years.

As a part of the contract, Wipro will be responsible for application development and maintenance, as well as providing infrastructure management services, for Citi’s global operations, sources said. The contract also requires Wipro to set up a large offshore delivery centre in Bangalore, to exclusively provide services to Citi.

In a reply to a specific query by Business Standard, Wipro offered not to comment on “market speculation”. A Citigroup spokesperson in India also declined comment.

Citi is already an existing client of Wipro, though most of IT outsourcing services are done by Tata Consultancy Services Ltd (TCS), India’s largest IT services company. According to industry sources, TCS derives about $700 million in revenues from Citi every year. Apart from TCS and Wipro, Nasdaq-listed Cognizant Technology Solutions Corp is another vendor of the Manhattan-headquartered company.

The new contract from Citi is expected to give a much needed fillip to Wipro, which has been earnestly trying to grow its banking, financial services and insurance (financial solutions), or BFSI, vertical at par with the large Indian peers.

In an interview to Business Standard in April this year, Wipro’s chief executive officer T K Kurien had said the company was witnessing good traction in the retail banking space. The investment banking side of the business continued to be a pain point for the company, he added.

“We have grown quite well in the retail banking space whereas we have been hammered in investment banking. Investment banking is about one-third of our financial services business, which is a significant portion of our total portfolio.”

The company derives close to 27 per cent of its revenues from the BFSI segment. In the quarter ended March 31, the BFSI vertical saw a sequential decline in growth of 1.5 per cent, although on a year-on-year basis, it grew around 2.4 per cent.

Wipro’s stock closed at Rs 343.05 on Wednesday on BSE, an increase of 0.57 per cent, while the benchmark Sensex gained 0.12 per cent to 19,245.70.