Drop in valuation makes BPOs attractive to PEs

Et, 20-6-2007, Page 5

Valuations of Indian BPO firms, among the most expensive globally, have undergone a correction since beginning of the year making them more attractive to PE players looking for BPO buys in the country.

WNS, India's largest third-party BPO after Genpact, is currently valued at 44 times its earnings, at a significant discount to the price it used to command six months ago.

Valuations peaked in February this year. current valuations are between 2.5 to 4.5 times the sales, and 15-20 times the EBDITA depending on the size, margins and growth prospects. Other factors that determine the valuation are voice and non-voice mix and domestic and international BPO business mix.