Blackstone, the US-based private equity group, yesterday completed its first management buyout in India by agreeing to acquire an 80 per cent stake in Intelenet Global Services, an outsourcing company that is co-owned by Barclays.

The value of the deal was not disclosed but is thought to be about $200 million (£100 million).

Barclays and Housing Development Finance Corporation (HDFC), an Indian financial services provider, are selling their 50 per cent stakes in Intelenet, a joint venture established in 2004 to capitalise on India’s outsourcing boom.

Intelenet will continue to provide back-office functions for Barclays’s retail and business banking divisions until the British bank can service itself from its own operation in India. Intelenet has agreed to help to set up this new offshoring business.

Intelenet, which has its headquarters in Bombay, provides services to domestic and international clients in the financial services, retail, telecommunications, travel and insurance sectors. It has gross assets of $107 million.

Under the new ownership structure, the management will retain 20 per cent. The strategy is to expand operations in Britain and set up facilities in the Philippines and Mauritius. It has 18 call centres in India and Europe.

The deal values the company at more than double Allsec Technologies, an industry rival, which has a market capitalisation of $77 million and is 28 per cent owned by Carlyle.

It marks progress for foreign private equity groups, which have found it difficult to make progress in India.With the local stock market continuing to ride high, many private owners are choosing to float their businesses rather than sell out.

Apax Partners, one of the world’s largest venture capital groups, has yet to complete its first investment after setting up an office in India last November. It is in talks to buy an $800 million stake in Patni Computer Systems.

However, the pace of private equity investments in India is picking up. So far this year, there have been 22 deals worth about $2.2 billion, compared with $3.2 billion for the whole of last year, according to Thomson Financial.

In January, Blackstone, which is planning its own $4.13 billion initial public offering this year, said it would buy a stake in the unlisted Indian media firm Ushodaya Enterprises for $275 million. Carlyle is also reportedly bidding for Cambridge Solutions, another outsourcing company.

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