Indian based Small and Mid-sized BPO companies are in trouble
October 17, 2008
Due to US and global recession Indian based small and mid sized IT and BPO firms will be in trouble soon. Most of these companies are niche players and they have revenue less than 10 cores. For example only 25% of the companies registered with Software Technology Park (STPI), has revenue more than. 100 core rupees. From overall software export, India gets 70% from top 20 companies and the rest comes from small and mid-sized companies. Forrester Research analyst Sudin Apte says the bottom 30% of the Indian IT and BPO companies will consolidate sooner than later to stay in business. He also predicts that these companies will have significant cash-flow issues for the next quarter and they either need to have strategic partnerships with bigger companies or they will go out of business soon due to cash flow issues. Many other analysts agree that it is tough time for small and mid-sized firms in India and they also think that there is significant interest from other big companies and investors for mergers and acquisitions.