Cognizant Technology Solutions and Capgemini are among the bidders in talks to buy Oracle's India-based financial services business unit, people familiar with the discussions said.
Credit Suisse , which is advising Oracle through its New York office for this transaction, is learnt to have approached only a handful of bidders for a potential deal, people familiar with the negotiations added.
"Wipro, HCL and L&T Infotech, which were among those interested, are no longer in contention," one of the people said. Oracle is also reported to have scaled down its original expectation of around $400-500 million for the services business, which includes software services and business process outsourcing. For FY11, services and BPO revenues were together around 1,000 crore or $222 million.
ET had first reported on May 10 that Oracle could look at a possible sale of its software services unit in India. Oracle Financial Services Software (OFSS) has two primary lines of business, products consisting of the Flexcube suite of banking software, and services. Oracle, which is a products and technology firm, wants to sell off the services business it acquired from i-flex because it believes services is not its core business.
In response to an e-mail from ET, Cognizant said, "As a policy, we do not comment on market speculation." Oracle's media agency said the OFSS response was "No comments". A spokesperson for Capgemini also declined to comment.
A banker advising a potential bidder for the business said Oracle's financial advisors would only entertain approaches from "select IT firms" adding that there is no formal sale process initiated by the US firm. "Also, it is not the case that they (Oracle) are desperate to do a deal, only if it matches their expectations a deal can be closed," he added.
"Initially, Oracle did not want to sell the services business. Oracle felt they were buyers, not sellers. But over the years, the services focus decreased and management was more interested in the licence revenues," a company official had earlier told ET on condition on anonymity. Oracle has made over 50 acquisitions in areas of database, technology, and applications.
The services business has seen high employee turnover - some of it voluntary and some involuntary because of downsizing. The contribution of services to the total revenue of OFSS has also been coming down. From around 50% of revenue when Oracle acquired i-flex in 2005, services contributed 25% in the most recent March 2011 quarter.
