‘IT industry’s issue is not job losses, but re-skilling people’

Business Process Outsourcing firm Intelenet Global Services is the only company in which private equity major Blackstone has invested twice. In 2015, the global PE firm returned to invest in Intelenet after four years of its exit. The company is now gearing up to more than double its turnover to $1 billion by 2020, from the present $430 million, Executive Chairman Susir Kumar told BusinessLine . Kumar, who is also a Business Process Management (BPM) council member at Nasscom, is of the opinion that the issue before the industry is not of job losses, but re-skilling. Edited excerpts:

What made Blackstone re-invest in Intelenet, which is rare for the PE firm?

Blackstone’s reinvestment is a signal of the faith they have in our management. They did it partly because the management team is intact and partly because of the capabilities we have. In the last one year, we have spent a lot of money and effort in re-branding ourselves as Intelenet. We had to build our sales organisation because we did not have one. We were leveraging Serco’s system. We had to build the capability because a year before we did the deal with Serco, everything was frozen. (Intelenet Global Services was acquired by Serco Group in 2012. In 2016, Serco’s Indian operations was acquired back by Intelenet.) So, we could not build the capability. The past 5-6 months have been great for us. The biggest thing we wanted to do was to ensure that we leverage the Blackstone portfolio opportunities.

Intelenet is looking to more than double its turnover by 2020. Where do you expect the growth to come from?

That’s the broad destination, and our path will be a combination of organic and inorganic growth to get to the $1-billion mark. One billion in three years can only happen with inorganic growth, and we have deep pockets to do it. We will not buy at a wrong price; but we are happy to buy if a good opportunity comes in. On the inorganic front, we will not go for it at the cost of profitability or wrong valuation. So, I think if we do not find the right opportunities, we are happy to be a smaller than $1-billion company; but a more purposeful, profitable and impactful company.

For inorganic, we will bring in a healthcare expert in the US; or an expert in banking and financial services — a fintech company in the UK.

Are there any IPO or stake sale plans?

We may go for IPO in a year. Nothing is firmed up; it’s just an internal discussion that we may look at an IPO as an option. Stake sale — we don’t want to do immediately. We are growing well. So, we would want to hold that for some time. When we convert most of our deals that are in the pipeline, our valuations will go further up.

What do you think are the issues before the Indian BPM sector?

A major concern is to ensure the supply side of the industry is addressed, second is to ensure we are still a country phenomenally good for outsourcing and offshoring, and is stable and has no disruption in any form or shape. We are extremely safe from the data security point of view, sobusinesses do not need to worry about the safety of their data with us. Everybody is talking about data security.

Job cuts is the biggest fear in the IT industry right now...

Attrition or incidents like people being told to leave, or things like these that are being spoken about — I do not think it is real. The number of jobs being created now compared with five years ago, has come down, because the growth rates have come down. Also, automation is taking place right now, which to some extent is playing on jobs.

Internet of Things (IoT) is happening, and it will create at least a million jobs. Emergence of more technology-led applications, changing of platforms such as from Android to iOS and data security will lead to job creation. But the issue is not about jobs, but about re-skilling the people to take on a higher degree of jobs.

How is Kids Out of Home (KOOH) Sports faring? (It is a sports outsourcing initiative company set up and managed by the same management team as that of Intelenet.)

In the sports business, our vision is to create a fitter nation. We are training about 1.7-lakh children. We have trained about 1,500 women in self-defence and have a lot of programmes for the youth. It is still in the early stages as people are not spending money on sports. We have spotted an under-16 boy who ran 100 metres under 11.4 seconds (Usain Bolt does it in 9.7 seconds). We are looking at consolidating the entire academy business.

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