Points covered: The Indian IT/BPO Industry. The story so far.. BFSI – The dominant vertical BFSI – Will it grow as a vertical ? PE/VC interest high The “Non Linear” Path.. Looking Ahead Presented by Ramit Sethi, June 2013

1. Indian IT/BPO Industry | BFSI
Ramit Sethi
June 2013

2. 22
Agenda
• The Indian IT/BPO Industry. The story so far..
• BFSI – The dominant vertical
• BFSI – Will it grow as a vertical ?
• PE/VC interest high
• The “Non Linear” Path..
• Looking Ahead

3. 33
Indian IT/BPO | The Story so far ..
• Size of Industry USD108bn in 2013. 8% of India GDP.
• Exports from India USD 76bn. Key Markets US (61%) & UK
(17%)
• Very Profitable ~ 20%-25% margin. Large Cash Reserves.
• Excellent Hiring engine; Infrastructure and Ability to Scale.
• Inorganic Growth path used selectively to grow
Capability, Customers and Geography.
• Global Delivery Model/ Time & Material price at the heart of
the offerings. It worked well !
• Domestic India market growing.. But low margin.
• Social, Mobility, Cloud and Analytics. Promising but small.
• The quest for a viable “Non Linear” play continues..
What got them here, wont be enough…!

4. 44
BFSI - The dominant vertical
• With a 41 % market share of the industry, you cant ignore it
• Mature in its outsourcing models and pricing models.
• Captives, to Managed services to Virtual Captives. All tried !
• BFSI has genuine Vertical processes, in addition to the usual
horizontals like F&A, HR etc.
• Low hanging fruit taken! Customer
Service, Cards, Mortgages, Capital Markets all been done.
• Client set expansion and new geographies being explored.
• Move to KPO – Research & Analytics. Bundled with BPO.
• Pricing under squeeze.
So is this saturated..? Not really!

5. 55
BFSI – Will it grow as a vertical ?
• Legacy annuity business stable.
• Cost pressures / Reorganisation / Regulatory Needs, drive further
spending in IT/BPO.
• Mature markets will innovate.. New markets will follow the old trend.
• Products Vs Process. Utilities.
• Increasingly the need for a joint IT/BPO solution. Managed Services?
• Regulatory Load increasing. Dodd Frank / Basle / IFRS.. It wont stop
• New Emerging Trends : Social, Mobility, Could & Analytics. How will
these affect legacy systems ? Risk ? Delivery ?
• Captive Vs Third party. Structures.
• Pricing models. Leverage balance sheet.
New deal structures, delivery models and markets.. Will drive new business.

6. 6
Source: Venture Intelligence / NASSCOM 2013
156
237
PE/VC Deals by
Volume
IT/BPO Others
40% of all PE/VC
Deals were in IT/BPO
3.2
5.47
PE/VC Deals by Value
USD Bn
IT/BPO Others
37% of all PE/VC
Deals by Value were IT/BPO
2012 – Volume or Value. Both are significant
PE/VC interest in the IT/BPO sector – High

7. 77
The “Non-Linear” path.. is possible
• Investments in IP led platforms and products.
• Leverage Balance Sheet strength. Capex to Opex ?
• Pricing Models. “Outcome based” and “Pay per use”.
• Bundling of solutions. IT/BPO/Consulting.
• KPO services.
• Data into Insights. Analytics.
• Catch the new Emerging Areas. Social, Cloud and Mobility.
• Structure Large Deals. Quasi M&A portfolio.
Are just some examples…

8. 8
IT/BPO will use M&A to grow.
• Adding scale /size.
• Expanding to new
geographies.
• Gain domain expertise
• Set-up global delivery
capability.
Inorganic Route to Growth - M&A’s
Source: NASSCOM
2006-2008 2009 - 2013
WNS - Aviva BPO Serco – Intelenet
TCS – Citi BPO Genpact – Headstrong
EDS – Mphasis BPO iGate – Patni
Wipro – InfoCrossing Tech Mahindra -
Satyam
HCL – Axon Infosys - Lodestone
It’s Quicker !

9. 99
Looking Ahead – Key Imperatives
• Non Linear Strategy in place ?
• Use the Cash. Large Deals / M&A
• Recognise “Captives”. Think BOT.
• Domestic Market Delivery Model (DMDM). Cheaper / different
• Move DMDM to new difficult geo’s. Europe / China /Japan.
• Embrace emerging new trends. SMAC.
• Bundle Offerings. Dig deep.
• Defend US business. Currency / H1B visa…
Interesting times to watch these companies make the turn !

10. 10
Ramit Sethi – Presenter Profile
A seasoned business executive with 25 years of leadership experience in
Global Banking, Corporate Finance, M&A, Corporate Restructuring
Advisory, Business Process Outsourcing (BPO) / Knowledge Process
Outsourcing (KPO) industries and Eco Energy. Chartered Accountant.
StrongBox Ventures, Founder & CEO – Advisory Services since 2012.
Founded CareerCo, an online assessment and counselling company.
Wipro - Senior Vice-President and Global Head - Financial Services (BFSI)
BPO/KPO businesses. Built the business. Opened Poland / China. 2007 - 2012
Infosys BPO - Member, Executive Council. Built the KPO services.2005-2006.
KPMG India – Partner, Corporate Finance & Head, Restructuring Services.
Several M&A, valuations and advisory deals. Won “Emerging Market Deal of
the Year in 2004”. Built Restructuring Services for India. 2000- 2005.
13 years with Standard Chartered Bank (SCB). India & Dubai.

11. 11
Thank You!
Ramit Sethi
16/2 Friends Colony - West,
New Delhi, India
www.sboxx.in
Email: ramit.sethi@sboxx.in
Ph: +91 98183 70000