Aditya Birla Minacs plans KPO acquisition

"We are looking for acquisition across geographies. The size of acquisition could be the same as our last acquisition (Minacs for $125 million) or more," Dev Bhattacharya, group executive president, IT and BPO business, told Business Standard.

The company, if needed, would look at liquidating a part of the equity stake for raising funds for capital expansion as well as acquisitions. A slew of private equity funds has already knocked the door of the company and no decision has been taken yet, said Bhattacharya.

The KPO business of Aditya Birla Minacs, with a single banking client currently, is a fairly new venture. It will focus on verticals like retail, telecom and BFSI. The operations are currently headquartered in Bangalore and have a team of 50 people.

The recent dollar volatility did hit the company a bit harder than its counterparts. "Overall, we had a hit of $30-40 million. The reason being the Canadian dollar's appreciation over the US dollar was almost 23 per cent and in India, the currency appreciated by almost 10 per cent," added Bhattacharya.

It also impacted the company's integration plans with Canada-based Minacs.

However, going ahead, Bhattacharya expects the company to clock a growth rate of 20-25 per cent year-on-year. At the end of March 2008, the company's revenue was $392 million (around Rs 1,680 crore) and it expects to touch $430 million (around Rs 1,800 crore) by the end of this year. Bhattacharya aims to touch revenue of $1 billion in the next two years.

Bhattacharya also sees 50-60 per cent of work being offshored to India and other low-cost destinations. "A lot of customers facing on-site operations and other such functions will continue to be in Canada. But a lot of support work will be moved to India," he added.

The BPO firm is also expanding its business in geographies like the Philippines, Latin America, Eastern Europe and India. Bhattacharya said, "Most of these geographies are a growth opportunity for us rather than for near-shore capability." For instance, Latin America will allow the company to target business opportunity in Hispanic countries, whereas, Eastern Europe will give the company capability in multi-lingual operations.

It is also increasing its focus in the domestic market. In the next 12 months, the firm will set up at least one centre each in the southern and eastern parts of India. Currently, India contributes 4-5 per cent to the company's revenue.

But going ahead, Bhattacharya expects this business to grow in the range of 40-50 per cent. It has five centres in India: Banglaore (3), Mumbai (1) and Baroda (1).

The company employs around 13,000 people and plans to add another 2,000-2,500 by the next year.