The Hindu Business Line : IPO not in near future: Progeon

PROGEON, the business process outsourcing subsidiary of Infosys Technologies, has quashed the market talk about a possible initial public offer (IPO). "At this stage, Progeon has no plans for an IPO in the foreseeable future," said Mr Akshaya Bhargava, CEO of Progeon, in reply to a Business Line's query.

However, sources in investment banking circles said the company was planning to go in for an IPO in a one-year timeframe and has started the groundwork.

The Citigroup, an investor in Progeon, is apparently seeking a better return on its investments in the BPO and is open to an exit at a premium through an initial share sale of the company.

Commenting on whether growth of the company was favourable, Mr Bhargava said "I want to reaffirm that Progeon's performance is in line with our financial guidance and we are satisfied that our strategy is delivering expected results."

For the quarter ended June 30, Progeon posted an operating loss of $900,000 on revenues of $7.2 million. The company had attributed the losses in the June quarter to the one-time charges and the foreign exchange mark-to-market. In Q4 last fiscal, the company had also faced a loss of $0.7 million.

Progeon added two new clients during Q1 taking its overall client base to 16. Of the 16 clients, twelve are also customers of parent Infosys. One of the top ten banks in the US, which signed up a deal with Infosys during the June quarter, also signed up Progeon as strategic partner for its BPO operations.

The company had added 341 people during the Q1 to increase its overall headcount to 2269, while it has faced an attrition of 39 per cent.