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HDFC Picks 26% Stake in Rural BPO Firm RuralShores

16 June, 2009

Consolidating the belief that rural sector is the new alternative market, India’s largest home finance company, Housing and Development Finance Corporation (HDFC), has picked up a 26% stake in Bangalore based rural BPO firm, RuralShores, reports The Economic Times. The start up was floated by 6 technocrats last year. 

RuralShores plans to link up about 500 locations with populations below 20,000 to the BPO sector in the next seven years. The company’s promoters include former E&Y executive V V Ranganathan, Mastek MD Sudhakar Ram, former MD of Xansa India Murali Vullaganti and G Srinivas of Dawn Consulting.

The company is looking at setting up 80-100 seater centers in towns with populations of 10,000- 15,000 with clusters of villages around them. Each of the company’s center employs about 150-200 people.  Currently, the firm operates two such centers. While one of its center is located at Bagepalli, the other is at Ratnagiri, near Vellore in Tamil Nadu. The Ratnagiri center operates along with the local schools around it.

With the demand in the urban areas drying up, many companies are now looking at the rural markets. The Steel Authority of India, country’s largest steel manufacturer recorded a rise in volume sales by more than 10% in the quarter ended December 31, 2008, as it saw increased demand in the country’s villages. The company also plans to expand its rural distribution network to sustain demand.

Recently, Chennai based technology products company, Novatium Solutions tied up with Bharat Sanchar Nigam Ltd (BSNL) to roll out broad band services with its ‘thin client’ technology in rural areas.


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Lok Capital part exits investment in rural BPO firm RuralShores with 6x returns

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2 Comments
kumar . 6 years ago

The idea of rural BPO sounds good to the ears, but how many would have experianced the advantages and have seen the operational and growth success of them.

Advantages

1.Low employee cost.

2.Peaceful surroundings.

3.Employees joining the BPO is more for personal reasons than corporate designed HR strategy(consistency in quality manpower is questionable) to meet the demand in case of attrition especially skilled and experianced.

Disadvantages

1.Experainced managers and technical staff extremely difficult to find due to low wages and in case of attrition .(Rural BPO industry is still people centric and depends always on few people who are committed by passion, Is passion replicatable model for matured organisations???)

2.No proper support from hubs either technical, training & development or mentoring of staff working in rural areas.

3.In case of worst case scenerio, like organsation not doing well, folks working in the corporate centers pack up things well and quit while those working in villages find it very difficult to get jobs due to locational disadvantage and movement.

4.Familiies of experianced staff working in villages suffer with poor amenities, education of children and safety. While families in cities become competitive and have better advantages over years..

5.Employees skills become obsolete, due to no proper rural bPO methodology model in the industry.

6.New hires are lured with higher postions for lesser experiance and wages, while senior managment enjoy the industry standards working in cities and industry equal pay. All these will dilute the work and organisational ethics in long run.

Is Infosys able to do it or is it outsourcing to sub -vendors.to sub sub vendors

ravi . 6 years ago

Rural BPOs ahve no HR strategy to employ and retain experianced staff especilly middle managment and senior management.

One may do a survey on this statement to find the actual facts…

HDFC Picks 26% Stake in Rural BPO Firm RuralShores

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