Warburg to bank 10x money on WNS float

Global buyout firm Warburg Pincus is set to make a stellar return on Indian business outsourcing company.

Warburg Pincus, the global private equity firm, is set to net a return of more than ten times its original investment in WNS Global Services, a business process outsourcing company which started trading on the New York Stock Exchange today, according to a source close to the deal.

Stock in WNS rose 6.5% on its first day of trading yesterday on the New York Stock Exchange in a difficult market for initial public offerings.

WNS opened at $21.10, above its $20 offer price. The stock hit $21.50 during morning trading, on volume of about two million shares. The company raised $224m (€178m), offering of 11.2 million American depositary shares.

The company said in a statement that of the total offering of 11.2 million ADSs 4.5 million were sold by the company, while 6.7 million were sold by shareholders, including British Airways. 

The selling shareholders, including Warburg Pincus, have granted to the underwriters an option to purchase up to an additional 1.6 million shares to cover over-allotments. It is Warburg Pincus’ 106th public offering of a portfolio company.

Warburg Pincus invested in WNS in 2002 as part of a “carve-out” of the business from British Airways although British Airways retained a minority stake.

WNS has stated that it intends to use net proceeds from the sale of the ADSs by the company for general corporate purposes, including capital expenditures and working capital, and for possible acquisitions of businesses and delivery platforms.

WNS will not receive any proceeds from the sale of ADSs by the selling shareholders.

Morgan Stanley, Deutsche Bank and Merrill Lynch were the joint book runners of the offering.  Citigroup and UBS served as co-managers.