Summary

Since early November 2009, media speculation regarding changes in Patni Computer Systems has yet again gathered steam.  Patni is one of the oldest India-based IT services companies providing Applications Development and Maintenance (ADM), Infrastructure Management, and Business Process Outsourcing (BPO) services. Similar speculation over ownership changes in 2007 did not materialize, reportedly because the Chairman, Narendra Patni, was not ready to sell his stake.

This time, it is believed that all three Patni brothers (Narendra Patni, Gajendra Patni, and Ashok Patni), who hold 48.3 percent among themselves, as well as private equity (PE) firm General Atlantic, which owns another 18 percent, are ready to sell their stakes in the company.

If these speculations materialize, it would be one of the largest acquisitions in Indian IT-BPO industry with the potential to cause a major shift in the Indian supplier landscape and pose wide-ranging implications for buyers. This report explains a viewpoint of what a divestiture by majority shareholders in Patni would mean for potential acquirers, buyers, and other suppliers.