HCL Technologies, Mahindra Satyam, Infosys and L&T are in the race for buying the services business of Chennai-based software firm Polaris Financial Technologies.
Early this month, Polaris announced a split of its business into two divisions, services and products, with a separate CEO for the services business and individual CEOs for different product lines, Times of India reported.
The firm, which is ranked as the eleventh-largest Indian software exporter, is focused on the financial services industry. Its services business earned $330 million in 2012-13.
“We stay committed to the road map articulated by our chairman and CEO Arun Jain during the announcement of our annual results for FY13,” the Polaris spokeswoman said.
In 2012-13, Polaris reported a net profit of 201 crore on revenues of 2,308 crore.
For potential buyers, Polaris’ services business represents the largest asset available in India today to expand their footprint in the financial services industry, which despite a slump continues to be the biggest spender on technology.
The deal is being driven by Citi, which is Polaris’ largest client, contributing around 35 percent to its services revenue. It also holds 20 percent equity in Polaris through Orbitech.
The potential buyer could get committed business from Citi for a period of 3-7 years, which is typical in such deals. Earlier, when TCS acquired Citigroup’s captive BPO in India in 2008 for $505 million, the Mumbai-based company also got $2.5 billion in committed revenues over nine-and-a-half years.
Citi’s business with Polaris represents one of the last large contracts in the country. Citi’s BPO business is now with TCS, application development and maintenance and infrastructure business with Wipro, and some amount of services with the erstwhile I-flex Solutions (now known as Oracle Financial Services Software).
