Epicenter is not only the biggest
among the specialized companies in
India, but also its specialization
- accounts receivable management –
is also an opportunity that few Indian
companies have woken up to. What is
also significant about the company
is that it has managed to get this
highly specialized business without
a partnership with a US collection
company and is probably the only collections
BPO Company in India to follow this
direct-to-client model.
Though set up in 2000, the company
commenced operations in a significant
scale only in 2001-02 and registered
a whopping growth of 400 percent in
2002-03 to reach a revenue figure
of $ 13.5 million. The company serves
some of the biggest names in credit
card business like Providian and Amex.
Collections – traditionally
a small-scale industry in the US –
has shown a tendency to consolidate
in last few years. This trend, coupled
with the India offshoring trend, is
likely to trigger a few cross-border
M & As among Indian BPO companies
and US-based collections agencies
and debt purchasers. Epicenter may
be one of the first ones to do a US
acquisition. It has announced that
it plans to raise around $ 15-20 million
for acquisition and has already zeroed
in on a financial advisory firm to
help with the acquisition. It is understood
that in case of an overseas acquisition,
the focus will be on beefing up the
number of clients.
Though the company did register extremely
high growth, it is still dependent
too much on a single client that contributes
60 percent of its revenue. By the
end of 2003-04, it is expecting that
it would come down marginally to 55
percent, still a very high figure.
It needs to bring it down further.
Epicenter’s independent business
model, though a sound strategy in
the long term, has meant that the
company is still doing early stage
collections. The company needs to,
and most likely will, change that
soon and add some mid-stage collections
work to its portfolio. An acquisition
may accelerate both processes.
Though there have been speculations
in the last few months that the Kalyani
Group, the principal promoter of the
company, would divest wholly or partly
its stake to a strategic investor,
the indications of late are that it
may continue while bringing in a large
US co-investment company that would
help it ramp up its operations. The
company has already appointed a senior
collections industry person in the
US as CEO, based out of the US office.
Epicenter also intends to invest about
$5 million to set up a fourth center
with about 300-500 seats outside Mumbai.
With more than 90 percent of its revenues
coming from collections it has started
targeting tech help-desk and retail
as well, without diluting the collections
expertise too much.
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