RPG Group to acquire 49.5% equity in FirstSource

October 26, 2012: Sanjiv Goenka promoted RPG Group will acquire 49.5% equity in FirstSource Solutions Ltd [stock quote], a public listed BPO firm for Rs 280 crore, by issuing shares and stake purchases. As per the official briefing, CESC, the flagship company of RPG will buy out 5% each from three major share holders of FirstSource Solutions Ltd, ICICI, Temasek and Fidelity. CESC subsequently will be marketing these shares at the opening rate of Rs 12.10 per share. This would enable RPG group to pick up a majority stake in FirstSource Solutions Ltd.

sanjiv goenka. Image source wiki

As a starting step of the deal, CESC’s wholly owned arm Spen Liq Pvt Ltd is eyeing for acquiring 35 per cent stake in Firstsource. Company sources stated that the buy out will be done through the subscription of fresh shares worth Rs 275 crore. Returns from this will be used by the company for the repayment of the outstanding FCCBs (foreign currency convertible bonds).

At the same time RP-Sanjiv Goenka Group is also buying 15 percent stake from existing Firstsource shareholders, ICICI, Temasek and Fidelity, who hold around 18-19 per cent stake each. By buying 5% each from these three investors, the company will obtain 120 crore in total (Rs 40 crore from each investor).

CSEC is spotting the challenges behind the growth opportunities in power sector and unhealthy returns as the basic the reason behind this attempt of getting into a new area, business process management. CESC operating in power sector had reserves of around $700 million as of March 2012.

FirstSource Solutions Ltd was commenced in the year 2001 by ICICI Bank as ICICI InfoTech Upstream Ltd. The company offers business process management services across banking, financial services, healthcare, telecommunication and media, and is being served by more than 30,000 employees at present. It took about 6 years for the firm to grow globally and got listed on Indian Stock Exchange Public Offering. They went public in 2007 and clocked revenues of Rs 2,255 crore with net profit of Rs 62 crore for the year ended March 31, 2012. At this time Temasek held 25.8 per cent stake in the company. Presently it owns 18.8 per cent and is selling over a third of its remaining stake in phases as part of the exit.

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