ExlService Holdings, the holding company of EXL Service, a New York-based offshore BPO firm focused on the financial services and insurance sector may well be the second pure-play Business Process Outsourcing (BPO) firm with an India-based model to list in the American stock market.
EXL, which was the first offshore BPO firm to file for an IPO in the U.S.A., way back in December 2004, has filed an amendment Form S-1 with the Securities and Exchanges Commission (SEC) on 27 July 2006, just a day after Mumbai-based WNS had an impressive listing. In the revised filing, the firm has cut down its proposed issue size from $75 million, filed earlier to $60 million. WNS raised $224 million in its IPO.
In it’s filing, EXL Service has not disclosed the number of shares in offer or the pricing of the issue. While WNS got listed in the New York Stock Exchange, EXL Service has filed for a listing in NASDAQ. Citigroup, Goldman, Sachs & Co., Merrill Lynch & Co. and Thomas Weisel Partners were listed as underwriters for the offering.
EXL Service, headquartered in New York, and having facilities in Pune and Noida, India, acquired an analytics-services firm, Inductis, having a similar offshore model last month.
EXL, like WNS and the biggest pure-play offshore BPO firm, Genpact, is majority-owned by private equity firms — Oak Hill Partners and Financial Technology Ventures who hold 49.6% and 16.5% respectively.
Apart from ownership pattern, EXL Service shares a few more similarities with the top two BPO firms. Like Genpact and WNS, EXL became independent from its then parent Conseco in November 2002 in a management buyout. EXL, however, had started as an independent firm, unlike Genpact and WNS which started as captives of GE and British Airways respectively. It had subsequently been acquired by Conseco. It again became independent when Conseco filed for Chapter 11. These three firms also account for the largest share of offshore BPO work in insurance domain.
Focused primarily on the financial-services space, EXL’s major clients include American Express, Norwich Union (an Aviva company), Centrica, Prudential Financial and IndyMac Bank. The only major customer outside this segment is Dell. The company recorded revenue of $74 million in 2005, against $60.5 million in 2005. In the quarter ended March, the company recorded revenue of $21.6 million, including the revenue of Inductis and $17.8 million without it. The company derives close to 60% of its total revenue from three clients.
