According to a joint study of the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Evalueserve, a global business research and Knowledge Process Outsourcing (KPO) company, the Indian BPO and KPO sectors could witness 100 Mergers and Acquisitions (M&As) and IPOs over the next five years, with the deals being valued at USD 3 billion to USD 5 billion.
The study estimates that nearly 80 percent of the projected USD 3 billion to USD 5 billion worth of deals would be signed by the prominent companies in the industry. The smaller companies in the BPO and KPO industry, numbering about 400, would account for the remaining 20 percent of the transactions. The joint report also forecasts that most of the 20 major deals, involving M&As and IPOs, would be undertaken by a group of 10 large companies, which will explore options to diversify, while the smaller companies will see significant acquisition and funding activity in the short term.

ASSOCHAM also outlined the possibility that the companies may consider IPOs in order to raise funds for expansion, both organic and inorganic. The study goes on to predict that that the Indian BPO and KPO industries, driven by the increased level of M&A and IPO activities, would undergo consolidation, leading to the creation of few listed global companies. The report also emphasizes that the success of these deals depends on the effective integration of the two companies that have been merged or acquired.