GA and Oak Hill see Genpact rise on debut

General Atlantic and Oak Hill Capital Partners saw Indian BPO giant Genpact price below its expected range in New York yesterday, but then leap almost 20 percent before the close.

Genpact, a private equity-backed Indian business process outsourcing company, saw its shares leap nearly 20 percent on the first day of trading after floating on the New York Stock Exchange yesterday.

Genpact, a former subsidiary of General Electric, raised $494 million (€361 million) by selling 35.3 million shares at $14 per share. This was below its expected $16 to $18 range, but in later trading its shares climbed as high as $17.10 before closing on $16.75, up 19.46 percent.

The company itself sold half of the shares, while GE and its two private equity backers, General Atlantic and Oak Hill Capital Partners, sold the remainder. The underwriters can also exercise an over-allotment option of an additional 5.2 million shares. Genpact said it planned to use the proceeds to pay down debt, fund acquisitions and supply working capital.

Genpact was founded in India in 1997 to serve GE’s finance unit, operating from cities including Bangalore and Hyderabad. In 2004, GE sold a 60 percent stake to GA and Oak Hill for $500 million. Its former parent still accounts for about 75 percent of its revenues, which amounted to $613 million in 2006.

Morgan Stanley, Citi and JPMorgan acted as joint managers and book runners of the offering, while Wachovia Securities and Merrill Lynch as co-lead managers.

General Atlantic will retain a stake of about 25 percent in the business following the flotation. It is the firm’s fifth listing of a portfolio company this year, with IT outsourcing business Xchanging and online recruitment business Dice just two of those to float in recent months.