Mumbai: Renuka Ramnath-led private equity (PE) fund Multiples Alternate Asset Management Pvt. Ltd is in advanced talks to buy a controlling stake in human resources (HR) outsourcing and technology firm PeopleStrong for Rs400 crore, two people aware of the development said.
Multiples plans to buy about 80% in PeopleStrong from various funds, including PE firm Lumis Partners, HDFC Holdings and The HR Fund, the first of the two people said, on condition of anonymity. Global investment bank Lincoln International is advising PeopleStrong to find a buyer.
Founded in 2005, PeopleStrong provides services to about 175 multinational and Indian clients, including Tata Motors Ltd, Hero MotoCorp Ltd, Mahindra and Mahindra Ltd, Procter and Gamble India Ltd, Mondelez India Foods Pvt. Ltd, HDFC Life, Indig o Airlines, Vistara, Cipla Ltd, Dr. Reddy’s Laboratories Ltd, Hindalco Industries Ltd, Wipro Ltd and CitiBank India. It is present in 40 Indian cities and employs more than 800 professionals.
Founded in 2005, PeopleStrong received investments worth Rs50 crore early on. It received institutional funding from Lumis Partners in 2011 and a second round of funding from Lumis and HDFC Holdings in 2013. Its financial details and shareholding pattern is not yet known. In 2013, PeopleStrong had made a strategic investment in WheeBox, a talent assessment company, and acquired Webpay, a leading HR and payroll product provider in 2014.
Mails sent to Pankaj Bansal, co-founder and chief executive officer, PeopleStrong; Rohit Bhayana, managing partner and co-founder, Lumis Partners, and mails and text messages sent to Utkarsh Joshi, principal, The HR Fund, and Renuka Ramnath, founder and chief executive of Multiples, went unanswered. Spokespersons for HDFC and Lincoln International declined to comment.
“It is not yet clear whether the promoters of PeopleStrong, including Bansal, will retain their minority stake in the proposed transaction," said the second person mentioned above on condition of anonymity. Before Multiples, there were talks with a handful of PE funds and global strategic investors, this person added.
“In the past few years, there has been a high level of investor interest in HR firms, primarily those in the HR tech space, and to some extent, those in the broader staffing industry. HR tech is being viewed as a breakthrough sector in an industry which otherwise hasn’t changed significantly in the past 15 years," said Sunit Mehra, managing partner at talent advisory firm Hunt Partners.
Besides interest from PE funds, several HR-focused funds have been launched in the past. The HR Fund, one of the investors in PeopleStrong, is India’s first HR-focused private investment firm. Set up in 2011, The HR Fund invested in Gurgaon-based PeopleMatters Media Pvt. Ltd, Chennai-based HR start-up PiQube, Bengaluru-based talent transformation-focused software firm KNOLSKAPE Solutions Pvt. Ltd and women’s career destination platform Sheroes.
“The general view is that if some of the ideas which have been invested in succeed, especially in areas such as people analytics and assessment, it could herald game-changing practices for the industry as a whole," Mehra added.