Mumbai: Will the Godrej group exit the BPO sector in the future? That’s the question which has cropped up after the group sold its holding in US-based Upstream, which specialises in providing contact center solutions to organisations in the travel domain.
Godrej’s exit from Upstream was based on the fact that the call centre formed a low value-added business for the group. The group also has investments in other BPO/IT enabled firms like Compass Connections and CBay Systems, which it plans to individually evaluate.
Godrej group chairman Adi Godrej had recently told TOI that the group is ‘‘not wedded to the call centre business’’. On being further queried, Godrej said: ‘‘We would evaluate our investments in companies such as Compass Connections and CBay Systems on a case by case basis. Further investments in BPO/IT opportunities would again be evaluated on a case by case basis.’’
The Godrej group had marked an entry into the BPO/IT sector by picking up nominal stakes in Compass Connections and CBay some six years back. The investments were made by Godrej Industries and its subsidiaries, with the aim to explore the growth opportunity in this sector. The promoter holding in Godrej Industries is quite high, at 86%.
However, the contribution made by BPO/IT to Godrej Industries’ total income (Rs 783 crore in 2006-07) is not as large as chemicals, real estate and vegetable oils.
As India emerged as a favoured destination for BPO services, given the low cost of operation and high productivity, many Indian companies made investments in the sector. In May 2001, Godrej International, a wholly-owned subsidiary of Godrej Industries, finalised its investment in CBay. The group allied with CBay to create a medical transcription production center in Mumbai, which is now a captive unit of CBay.