US subprime crisis hits Indian BPOs

The tremors caused by the US subprime crisis has hit Indian shores, buffeting sections of the Indian BPO industry. WNS, a large player in this space, recently announced that that one of its clients, First Magnus, a us mortgage firm, had filed for Chapter 11 (bankruptcy protection).

This will result in its topline shrinking by $20 million (Rs 84 crore) and bottom line by about $4 million (Rs 16.4 crore). The company, however, declined to speak to BT on the subject.

BPO blues: Blame it on the US

iGate Global Solutions, another BPO player, which derives 10 per cent of its revenues from GreenPoint Mortgage, which declared itself bankrupt on August 20, will also take a hit. In an e-mailed response to a questionnaire from BT, N. Ramachandran, CFO, iGate Global Solutions, says the company derives 6-7 per cent of its revenues from the us mortgage market and "these revenues continue to be at risk". In view of this, it has redeployed 100 employees to other services.

At a press briefing, Amitabh Chaudhry, CEO, Infosys BPO, which also had an exposure to GreenPoint, said the impact of the crisis "will not exceed $1 million (Rs 4.1 crore) in revenues, as the company deals mostly with larger mortgage firms, which are expected to weather the storm.

Says NASSCOM President Kiran Karnik: "Some small players will be affected, but overall, there will be no major negative impact."