ASSIGNMENT NUMBER 1, HCCA Business Services Pvt Ltd.

acquisition by Hinduja Global Solutions Submitted By: Amod Kumar Gupta [ 10BM60007] Acquirer: Hinduja Global Solutions Ltd.(HGS), part of the multi-billion dollar conglomerate - Hinduja Group, provides outsourcing solutions that include Back Office Processing, Contact Center services and customized IT solutions to its global clientele comprising several Fortune 500 Companies.

Target: HCCA is a Human Resource Outsourcing (HRO) provider servicing marquee customers in Banking, Financial Services, Insurance and other industry verticals. HCCA offers a complete range of HRO solutions which includes payroll, statutory compliance and employee life cycle support to over 350 clients in India and has more than 500 employees.

Deal: HGS has acquired 100 % of the equity shares of HCCA Business Services (P) Ltd (HCCA) from 3i Infotech Ltd. The transaction also includes the Payroll Processing activities of 3i Infotech in UAE and other Gulf Council countries. Mr. Harish Chopra, founder of HCCA and current CEO, will be a part of HGS and drive the HRO practice. HCCA would become a wholly owned subsidiary of HGS.

Analysis: Human Resources Outsourcing is one of the fastest growing segments with large-scale offshoring opportunities Indian firms, which are witnessing high attrition and people related challenges while growing their business at a higher than global average, are increasingly looking at external partners such as HCCA to address human resource issues. In addition, global firms are looking at India as a low cost destination for HR outsourcing. Hinduja gets a critical entry point in this market segment. In July 2011, HSG unveiled a new global corporate identity. The rebranding exercise was done to integrate new ventures across geographies, while allowing customers to leverage a wider and diversified talent pool. The acquisition is a strategic fit for HGS as it provides HGS an entry into the HRO domain thereby expanding HGS suite of services and also helping it to offer more options to their clients. For HCCA this will provide them with an opportunity to use HGSs unique global delivery model to expand their operations both domestically and internationally and help take it to the next level. It also provides opportunity to extend and enhance HCCA's bouquet of services.

It builds on HGSs global delivery capabilities and presents both companies an opportunity to cross-sell to their existing clients. This also enables HGS to get a footprint in the Middle Eastern market. It reduces HGS dependence on voice based business Earlier, Hinduja Global had acquired On Line Support Inc., a Canadian customer relationship management company for C$74.85 million. These two acquisitions, will add annual revenue of around $68 million to Hinduja Global. This will take HGS revenues from US $242M in FY 2011 to US $320M on an annualized run rate basis. i.e. an increase of over 30%. As both the acquisitions have healthy profits, the overall EPS of HGS is expected to increase. As a result of the deal the HGS stock closed the day at Rs.332.50, down by Rs.7.40 or 2.18%. The stock hit an intraday high of Rs.342 and low of Rs.332. The total traded quantity was 419 compared to 2 week average of 704.