Firstsource has bagged a USD 80 million deal from Barclays. Firstsource will takeover 300 employees in the US.
CNBC-TV18 had first reported Firstsource takeover on January 14. Rajesh Subramaniam, CFO, Firstsource Solutions,said the five-year, USD 80 million deal is at current margin levels. Though, they refused to comment on the US listing, and said it was too early to do that. He said the USD 80 million will be equally spread out over five years.
Excerpts from CNBC-TV18's exclusive interview with Rajesh Subramaniam:
Q: Tell us a bit about what period this entire deal will be executed over and what your total order book is right now?
A: This deal is a five year contract, which will generate about USD 80 million in revenues for the company.
Q: The concern has been from the BFSI space that realizations will crunch down quite a bit because of the problems in the US and also in UK now. Does the deal come with average realizations that you have or is it at lower price point?
A: This deal comes at realizations, which are into the levels that we operate in as a company, be it at the revenue or at the net margin level. As for your question of what’s happening to the credit environment in the US and the UK, the inherent cost of operations that large customers like Barclays have will present itself as an opportunity engine for growth, rather then impair the ability from what is happening on the credit environment.
So we see this as a very attractive opportunity and we also believe that with the maturity of the BPO business and companies in India that are able to add value to customers, we see customer’s interest in their franchise to companies like us to help them deliver to their customers much better than currently.
Q: Firstsource might be looking actively at a listing in the US. Can you confirm that for us?
A: It’s an early speculation; I think we have always stated at the right time, we will be looking at an opportunity to list abroad, but it’s too early to comment on that.
Q: How will this USD 80 million be staggered over the next few years? Will it be front-ended, back-ended or equally spread out?
ns A: It will be equally spread out.
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