ICICI Bank defers stake sale in Firstsource Solutions

ICICI Bank is understood to have deferred the sale of its holding in Firstsource Solutions, a Mumbai-based pure-play business process outsourcing (BPO) entity. The bank along with its subsidiaries owns close to 27 per cent stake in the BPO firm. The bank was understood to have initiated discussions with a few global private equity (PE) and strategic players to sell its stake valued at around Rs 660 crore. Industry information indicates that this move has been necessitated by the recent drop in stock price to as low as Rs 13 from the earlier Rs 45. The 52-week high was Rs 89 for the stock. Industry sources indicates that PE players such as Warburg Pincus, Temasek were among others interested in the stake. The company employs close to 20,000 people and has revenues of around Rs 1,500 crore and a net profit of Rs 150 crore. Firstsource provides business process management to global players in the banking & financial services, telecom & media and healthcare sectors. While the bank declined to comment on the development, the company early this year had stated that “depending on the market opportunities, we always keep exploring various options.” The company at the end of the second quarter of the current financial year also slashed its revenue guidance to 21 per cent in dollar terms from the original 33-38 per cent. Commenting on this, MD & CEO Ananda Mukerji said, “While the business environment is challenging, we are pleased that we have been able to grow revenues and improve margins.”