Tech Mahindra gains on buyout buzz of Hutch's India BPO

NEW DELHI: Tech Mahindra Ltd surged over 1 per cent in a lackluster session on Tuesday on reports that the Mahindra Group’s IT services company is all set to buy Hutch’s India BPO business for close to $100 mn.

“As part of the deal, Hutch has also made a revenue commitment of $1 bn over the next 5-7 years to Tech Mahindra,” ET Now reported.

Hutch’s India BPO business caters to three geographies -- UK, Australia and Ireland. This deal is expected to give a revenue boost to Tech Mahindra and give it a much larger BPO footprint. The UK-based Serco was also in the race for the deal.

Investment banking firms Kotak Investment Banking and Goldman Sachs are the advisors to the deal. The deal announcement is expected tomorrow.

“This deal is expected to give a revenue boost to Tech Mahindra and give the company a much larger BPO footprint,” Angel Broking said in a report.

“This move is positive for Tech Mahindra as it would give inorganic boost to revenues when the company is not able to grow in tandem with other IT services players organically,” added the report.

The Mumbai-based brokerage firm continues to remain positive on the stock and maintain an ‘accumulate’ rating on the stock with a target price of Rs 850.