Household HSBC Watch

Kambay International (proposed: KBAY) began the road of completing an IPO, with its filing today with the Securities and Exchange Commission. The firm is a global provider of information technology or IT services dedicated to the financial-services marketplace. As the name implies, some of the firms IT operations are located in labor-cheap India.

The company, in its newly minted S-1, reports that as of Dec. 31, 2003, its largest clients include Household International (and sister companies from the HSBC Group family), Morgan Stanley, CitiFinancial (an operating unit of Citigroup), Development Bank of Singapore, ABN-AMRO and Sun Life Financial.

Added bonus here: steady revenue growth and profitability, analysts say. From 1999 to 2003, revenues grew from $44 million to $107 million, generating a compound annual growth rate of 25%. Profits for 2003 were $11 million. The company turned profitable in 2002, with net income of $4.4 million.

Offering specifications weren’t published in the first S-1. Details will follow in amended filings. For now, the company anticipates raising $115 million through an underwriting team of UBS Investment Bank, Robert W. Baird and Janney Montgomery Scott.

Investors in Kambay include affiliates of HSBC Group and several India-based investment engines.

Kambay is in Pune India.

Pune is rapidly climbing the Indian software exports ladder, having recently delivered over US$ 1 Billion in software exports. With 3 IT parks in and around the city of Pune as well as a Software Technology Park of India (STPI), Pune is fast becoming a preferred destination for IT players to set up shop. Big names in the Indian software market like Infosys, Wipro, Zensar, Cognizant, Geometric, Kambay, Tata Technologies, Mahindra Consulting and so on already have bases in Pune.

To felicitate Pune’s software industry for reaching this milestone, the Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) recently held an event at the International Institute of Information Technology located in the IT park at Hinjewadi. Speaking at the occasion, Ravi Pandit, vice-chairman, MCCIA, said, “With many top IT companies choosing Pune over Bangalore, Chennai, Gurgaon or Hyderabad, Pune has been firmly placed on the IT map of India.

Consumer watchdog organization Household - HSBC Watch estimates the cost of moving jobs from Salinas California, Tigard, Carol Stream and other locations would be easily offset, considering new innovations and court rulings on Internet telephony (Voice over IP or VOIP), thus bringing immediate profits to HSBC Plc and HSBC North America Holdings.

Although opposed to moving American jobs overseas, Household - HSBC Watch continues to receive consumer complaints which demonstrate clear violations of Regulation Z as spoken by customer service representatives in the U.S.

Perhaps Indian CSR’s will do a better job? The jury is still out on that one!

GE Capital International Services (GECIS) will establish an office in Kolkata within the next 45 days to oversee the establishment of its proposed remote processing operation in the city that would employ 1,500 people initially.

GECIS - established in 1997 - is the largest shared services environment in India employing over 11,000 people at its existing facilities at Gurgaon, Hyderabad , Bangalore and Jaipur.

We are confident that GECIS’s starting operations in Kolkata will lead to more of the big call centre operators also choosing to establish a base here,” Gautama said.

HSBC Electronic Data Processing (India), engaged in customer service and data processing for HSBC world-wide, has recently evinced interest in setting up a 1,500-seat call centre in Kolkata by March 2005.