EXL Service acquires KPO firm Inductis

EXL Service Holdings, an offshore business process outsourcing (BPO) firm has taken its first steps towards inorganic growth strategy by acquiring Inductis, a strategy and analytics company with domain expertise in financial services and insurance industries.

As a result of the acquisition, the $20-million Inductis, which has 250 employees and has a structure similar to that of EXL and is an expert in the same domain, will become a wholly owned and independently branded subsidiary of EXL.

Its managing principal and founder Sandeep Tyagi will head the consulting and research and analytics division at EXL.

Inductis has its back-end office in Gurgaon, while its frontend is in the US in addition to which, it has offices in New York, New Jersey and Singapore.

Growing at a compounded annual growth rate of 63 per cent for the last three years, "the company now aims to pursue an organic as well as an inorganic growth strategy," said Rohit Kapoor, president of the $74-million company, EXL.

Speaking of the strategic importance of the acquisition, he said, "BPO currently accounts for 90 per cent of our revenues and analytics, while advisory services accounted for 10 per cent. With this acquisition, we see three clear service lines emerging for us, wherein BPO will account for 70 per cent, research and analytics 20 per cent and advisory 10 per cent," said Kapoor.

"The Inductis and EXL combination will create a company equally strong in creating solutions and delivering them. Because of Inductis, we will now have the platform to grow faster and further invest in training and development of our people, client relationships, and intellectual property," said Tyagi while disclosing that the company had been growing at a rate of 20-30 per cent per annum previously.

In discussing the rationale behind the transaction, EXL's CEO and vice-chairman, Vikram Talwar stated, "The days of BPOs focusing only on cost reduction are over. With this acquisition, EXL plans to further our investment in assisting clients with positively impacting the top line and helping grow revenues by leveraging offshore research and analytics."

Inductis' clients include three of the top five credit card issuers, two major retail brokerage and asset management companies, a top 25 FTSE bank, a large commercial insurer, and a top five health insurer. The acquisition will allow the combine to effectively compete with much larger companies in delivering value to its respective clients.

"The competition comes from only larger companies such as Genpact and global MNCs like IBM and Accenture, as they too provide similar services," said Kapoor.