After Warburg, Nalanda looks to exit WNS

Its not just private equity firm Warburg Pincus that���s looking to log out of outsourcing firm WNS Global Services. It is now learnt that another shareholder Nalanda Capital, a Singapore-based hedge fund, is also eyeing the exit route. A person familiar with the development told ET NOW that Nalanda Capital has put its 12.3% in WNS on the block. The person requested anonymity as he is not authorised to talk to the media.

This comes a day after ET reported that PE firm Warburg Pincus has held initial talks to offload its 50.12% in WNS for an exit amount of $400 million. The transaction would value the BPO at $800 million.

While Merrill Lynch is believed to be advising Warburg on the stake sale, sources said Nalanda hasn���t appointed a banker but would just go with the seller that Warburg identifies. Since it owns less than a fifth in WNS, Nalanda would have lesser bargaining powers when it comes to price. Sources also said that apart from private equity firms such as Blackstone, Nasdaq-listed IT firm Cognizant is a likely suitor for WNS and will shortly kick off the due diligence process.

When contacted by e-mail, a spokesperson for Nalanda Capital said, ���As a matter of internal policy, we do not talk to the press.��� WNS and Cognizant said they do not comment on market speculations.

Considering that Nalanda Capital picked up a stake in WNS only last year, it wasn���t immediately clear why Nalanda Capital is selling its stake in the firm. ���Nalanda Capital is structured like a hedge fund, so it does not have any long-term obligations to stay invested. Also, it will be the right time to exit as they would make a profit,��� said an official from the private equity industry, who did not wish to be named.

Pulak Prasad, former co-head of Warburg Pincus India, runs Nalanda India. It raised Rs 1,600 crore a couple of years back and has a mandate to invest only in listed companies.

It is pretty active in the open market and has bought shares in Mastek Global, Carborundrum Universal, Triveni Engineering, Kirloskar Engines Sun TV and Mindtree. Nalanda typically buys shares in multiple lots and tends to pick up 7-8% in any company they invest in.

The hedge fund initially picked up 5.25% in WNS last March and has upped its stake over the last year to become WNS��� third-biggest shareholder with 12.3%. While Warburg Pincus owns 50.44%, the second-biggest is Fidelity Management & Research with 12.37%.