Re-energised Firstsource to pursue large deal opportunities

MUMBAI: BPO provider Firstsource Solutions, which was acquired by Sanjiv Goenka promoted CESC, expects to pursue large deal opportunities it could not address earlier because of the overhang of its convertible bonds that were coming up for repayment.

In December, the company will repay $ 237 million to bondholders through a mix of cash reserves ($ 137 million), the monies raised through the preferential allotment of shares to CESC ($ 50 million) and through debt ($ 50 million). "

"This will deplete our cash reserves but we will maintain solvency,"" said Rajesh Subramaniam, MD & CEO, Firstsource Solutions. Firstsource will pay bondholders $ 137 million from its cash reserves. It also expects to generate more cash from the business in the remaining two months of the quarter.

""We plan very aggressive penetration into some of the deals from which we have recused ourselves in the past,"" Mr Subramaniam said. The company plans to go after transformation deals in customer management where Mr Subramaniam said working outlay may have been constraint in the past.

Healthcare, where it has the largest percentage of revenues compared to other BPO providers, is expected to witness a boom because of US healthcare reforms. Mr Subramanian said the company will look at three investment areasf: healthcare, transformation deals in customer management, and in technology such as platforms and for internal use. It will also invest in creating centres of excellence.

Firstsource posted a net profit of Rs 36 crore on revenues of Rs 717.6 crore for the second quarter ended September 2012. Net profit zoomed 24% sequentially and revenues grew 6%. Shares of Firstrsource, which have up run up 50% over the last one month, ended 13% lower to Rs 12.34 on BSE on Friday.