IPO PRICING: Genpact (G, GE)

Douglas A. McIntyre

Genpact Ltd. has priced its IPO under the ticker “G” on the New York Stock Exchange of 35.294 milllion shares at a price of $14.00 per share.  Unfortunately, the estimates pricing range was originally set at $16.00 to $18.00.  The joint book runners for the offering were Citigroup, Morgan Stanley, and J.P.Morgan.  Co-managers are listed as Merrill Lynch, Wachovia, Banc of America, Deutsche Bank, Credit Suisse, and UBS.

This is now a former General Electric (NYSE:GE) GE unit, and it is a Bermuda-based offshore provider of business process outsourcing to General Electric and to many large global companies.  GE sold a 60% stake of Genpact back in 2004 to private equity, but it still held a minority stake and is the company’s largest customer with a contract through 2013.  Half of the shares are being sold by the company for funding and half of the shares are being sold by holders.

Here is the company’s own basic description of itself, and it sounds more like an outsourcing and cost containment operation that operates within other companies (mostly within GE now).  We manage business processes for companies around the world. We combine our process expertise, information technology expertise and analytical capabilities, together with operational insight derived from our experience in diverse industries, to provide a wide range of services using our global delivery platform. Our goal is to help our clients improve the ways in which they do business by continuously improving their business processes, including through the application of Six Sigma and Lean principles and by leveraging technology. We strive to be a seamless extension of our clients’ operations.

Genpact has more than 26,000 employees and operates in 9 countries. Its 2006 revenues were $613 million, and its business outside of GE is currently listed as 25.8%; so GE is almost 75% of its business for now.  Immediately following this offering, 206,409,349 common shares and no preference shares will be issued and outstanding.  GE is selling 5.88+ milliojn shares in the IPO, and based on the prospectus it appears that GE will continue to own a 22.65% stake in the company after the IPO.

Jon C. Ogg
August 2, 2007

Jon Ogg can be reached at; he does not own securities in the companies he covers.