Citi selling India back office to TCS for $505 million

US financial giant Citigroup has been shedding non-core assets.

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Hong Kong/Mumbai: The US financial giant Citigroup, which has been shedding non-core assets, plans to sell its Indian back office operation to Tata Consultancy Services in a deal that one source said would be worth $505 million.

Citi's sale of the back-office unit to India's biggest software services exporter was set to be announced later on Wednesday, the source said.

A TCS spokeswoman said the company had called a news conference at its Mumbai headquarters at 0900 GMT and declined further comment.

Citigroup Global Services, the India back office unit, began as a business processing arm for Citi India in 1992 and expanded to serve Citi's global operations in 1998, according to its website.

The unit, which employs 12,000 people, operates out of seven facilities across Indian cities and offers back office services to Citi's consumer, corporate and global wealth management entities in 50 countries, the website showed.

In August, the Economic Times newspaper citing a source reported that a deal would guarantee Tata Consultancy business from Citi for five years.

In July last year, Infosys Technologies, India's No. 2 software services exporter, signed a $250 million outsourcing contract with Royal Philips Electronics and bought three of the Dutch firm's back-office centres.

At 0703 GMT, shares in Tata Consultancy, which has a market value of about $12 billion, was down 8.7 per cent at Rs 525.50 in a weak Mumbai market that was trading 5.3 per cent lower.