HOV shifts base to Chennai

Pune-based BPO company HOV Services Ltd has moved its headquarters to Chennai. This follows the company's recent acquisition of BPO services provider Lason, which has a large presence in Chennai.

Suresh Yannamani, president and chief operating officer - BPO services, HOV Services, said, "The acquisition deal was struck in February end, and takes HOV to the ranks of the top three listed BPO service providers in the country."

Post the $148 million Lason acquisition, the company has moved its books into the April-March accounting period, Yannamani said, adding that in combination with Lason, the merged entity expects to reach revenues of $250 million by the end of March 2008.

For the financial year ended December 2006, HOV posted revenues of $196 million. Of this, healthcare vertical alone contributed 47 per cent at the end of December 2006, while financial services accounted for 25 per cent. The company saw 35 per cent net addition of new customers last year, he said.

The company has also raised $188 million in new capital from global institutions "" $63 million in equity and $125 million as debt facility. At the close of the Lason deal, the company had over $85 million in equity.

"We have been moving from transaction and receivables processing to high-value services," said Yannamani. "We have also been able to stabilise current attrition rates to 20 per cent in India as opposed to the industry average of 40 per cent or above."

The company's high client dependency rate in the past, from a top 10 clients viewpoint, has been a cause for concern.

However, Yannamani said that the top ten clients in the company's three business lines -- accounts receivable management (ARM), enterprise management tools and services (EMTS), and insurance and tax services (ITS) "" currently account for 25 per cent of its overall revenues, down from about 30 per cent in March last year.

Lason has over 85,000 sft of office space in Chennai and a fourth facility spread over 50,000 sft is expected to be operational soon.