Research and Markets - HP To Sell USD 825 Million Stake in Indian IT Company

Apr 04, 2016, 08:04 ET from Research and Markets

DUBLIN, April 4, 2016 /PRNewswire/ --

Hewlett Packard Enterprise will sell at least 84% of their stake in Indian IT services company Mphasis Ltd. to U.S. private equity firm Blackstone Group LP. The purchase is expected to cost Blackstone around USD 825 million, but could reach a value of USD 1.1 billion if Blackstone buy HPE's remaining 16% stake through a mandatory tender offer. Blackstone is planning on using Mphasis to expand the firm's reach and offer their services in India. The IT services market in Asia is forecast to grow at a CAGR of 8.89% during the 2014-2019 period, according to a report available from Research and Markets. This growth could be higher than predicted due to Blackstone's expansion in this area.

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Mphasis is considered to be a mid-level player in India's financial software services industry, one which is estimated to be worth USD 150 billion. Mphasis ranked 8th in an annual domestic industry association survey for 2015, and posted sales of 58 billion rupees for the year ending March 2015. This is not Blackstone's first entry into the Indian market and the firm has invested USD 2 billion in India through real estate and private equity since 2015. 

The global big data IT spending in the financial services market is set to grow at a CAGR of 25.5% by 2019, as forecast in an industry report. The report highlights how big data has become the fastest growing technology adopted by financial institutions in the past five years. The market could register an even higher growth if international firms like Blackstone continue to acquire IT companies for the purpose of expanding their influence overseas. 

The banking IT spending market for Asia Pacific except Japan is forecast to grow at a CAGR of 8.27% by 2019 , as predicted in a market report, but again this growth could be higher due to investments from financial businesses like Blackstone. 

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