UK-based Prudential PLC may be exploring opportunities to sell its business process outsourcing unit in India. The captive — Prudential Process Management Services (PPMS) — is located in Mumbai and has an employee strength of 1,800 people. Sources in the industry say, the company is in initial discussions with investment bankers for a possible deal.
“The company is looking to sell its BPO operations in India and has already started talks with bankers. The deal is, however, yet to be struck as discussions are initial,” said an industry source. The exact size of the transaction is not known.
When contacted by ET, a Prudential spokesperson said, ”We don’t comment on market speculation. All that I can say is that we are undertaking a review of the work that has been done by the team in Mumbai but this was mentioned in our last results event.”
PPMS services not just the operations of its parent in UK but is also supporting operations in Prudential Asia. The company is setting up an additional 300 member facility in Mumbai where actuarial and market analysis will be done, in addition to back office work of insurance policies that is currently being done.
The company’s spokesperson added that nearly one third of the company’s customer services are done out of its India captive.
PPMS is the back office of Prudential PLC — an international retail financial services group which provides annuities, corporate pensions, with-profits and unit-linked bonds, savings and investments products, protection policies, equity release and health insurance products. It is present in India through its joint venture with ICICI— ICICI Prudential Life Insurance Company for providing life insurance.
According to the latest Forrestor report, over 60% of the captive centres in India are struggling due to lack of management support, spiralling costs, skyrocketing attrition and a lack of integration.
US-based Citibank is also learnt to have put its captive unit— Citigroup Global Services — on the block. According to the market buzz, the list of suitors include BPO companies like Genpact, WNS Global Services, Firstsource and IBM. The deal is expected to be in the range of $700-800 million.
Citibank, however, has not yet given an official statement on the deal. GE, another US-based company, was the other major multinational company which off-loaded a large stake in its captive unit- GE Capital International Services (GECIS).
The company sold its 60% stake in GECIS to private equity firms-General Atlantic Partners (GAP) and Oak Hill Capital Partners for $500 million in 2004.
Source: Economic Times