UK's Serco moves into Indian outsourcing market

Indian employees at a call centre provide service support to international customers, in Bangalore in this March 17, 2004 file photo. British govt services firm Serco Group Plc entered the Indian business process outsourcing market by buying 60 percent of Indian company InfoVision Group for 13.3 million pounds ($20 mln).

LONDON (Reuters) - British government services firm Serco Group Plc entered the Indian business process outsourcing (BPO) market by buying 60 percent of Indian company InfoVision Group for 13.3 million pounds ($20 million).

Serco, which operates the Docklands Light Railway in London, said on Thursday it will launch its brand in the Indian BPO market and then move onto the public services market through the acquisition.

"This is a good move for Serco ahead of its inclusion in the FTSE 100 and moves its operating profile even closer to that of Capita," said brokerage Seymour Pierce, which reiterated its "buy" stance and target price of 450 pence.

Serco is set to join the blue-chip FTSE 100 index on Dec. 22 as part of the index's quarterly reshuffle.

The acquisition values InfoVision at around $40.7 million, including debt. Serco has also agreed to buy the remaining 40 percent of InfoVision in two tranches over the next two years.

Shares in Serco, which hit a 14-week high on Wednesday after a strong trading statement from Carillion, were down 1.8 percent at 424 pence at 0849 GMT, underperforming the wider FTSE 250 index which was down 0.5 percent.