e-SERVE: All for the Citi

Citigroup's captive offshore services company, e-Serve International, became a 100% Citi subsidiary by means of Citibank Overseas Investment Corporation (COIC) acquiring the outstanding 55.6% of the company's traded shares at a transaction valued at about Rs 550 crore. The process is still to be completed, with buy-back dates not yet finalized. While obtaining full ownership of e-Serve and integrating it into its global operations provided Citigroup with increased operational flexibility to support its business, de-listing from exchanges allowed the company to drop certain rigorous competitive norms otherwise mandatory for a listed entity. 

The move also reiterated how a top-notch MNC financial giant prefers India as an offshore venue despite the backlash against outsourcing. And this was indeed not surprising, considering e-Serve had shown steady growth in the last few years. In fact, during 2003-04 it was awarded the first position by Software Technology Parks of India (STPI) for top exports in the SME category. Interestingly, it was also one of the Top 5 fastest wealth creators between 1997-2002, others being Wipro, Satyam, Infosys and Moser
Baer.