PUNE, INDIA: It wasn't much of a surprise. As rife speculations had already hinted, when TCS announced to acquire US Citi's captive assets in India, the only questions that comes is, who would be next?

With the financial troubles that the US financial giants are facing, among other questions that come to spotlight is the way forward for their captive operations.

India is anyway no stranger to captive sell-out deals that have been an increasing trend recently. The reasons so far have been manifold ranging from desire of Indian vendors to expand scale and revenues and inorganic growth to failure on part of foreign companies in managing captives in India.

The current US turmoil adds another flavour to the deal landscape. And there is no dearth of options.

Captives in 2006-07 contributed less than 40 per cent to the total BPO revenue from India and they are ripe candidates for a purchase, and recent deals like the AegisBPO of Essar buyout of AOL's back-office operations or the TCS-Citi deal only offer a glimpse of what lies underneath.

So is it a case of making hay while the sun shines? How advantageous can captive candidates be from a strategic, stability and long-term perspective eventually?

For TCS, the $505 million deal would mean an opportunity to provide process outsourcing services to Citi and its affiliates in an aggregate amount of  $2.5 billion over a period of 9.5 years.

TCS that has provided IT services to Citi since 1992 and is now one of the largest IT services partners for Citi, for its IT and business processing outsourcing services across  operations in North America, Europe, India, Japan, Singapore and the rest of Asia Pacific, would find broadening of its portfolio of end-to-end IT and BPO services in the global banking and financial services (BFS) sector.

Captives make sense for service providers that have learnt over the years to manage operations on a scale with well-built processes already. Captives, when bought, add value to that.

For  the selling side, it means reduction in overhead for a US company that is already grappling with cost issues and factors like headcount, attrition, SLAs are addressed properly bringing the core business focus into light.

However, stability of such operations, specially at a time when the very survival of US financial behemoths is in question, comes to the worry brows too.

As Pari Natarajan, CEO, Zinnov Management Consulting Pvt Ltd reasons, "Buying a larger asset in such a scenario might be at risk and companies are going to closely watch their assets."

The concern is shared by Ekta Aggarwal, Industry Analyst, ICT Practice, Frost & Sullivan, South Asia and Middle East who feels that while the possibility of sell out of captive BPO operations of US giants in India might seem to be a lucrative purchase, vendors would tread cautiously while investing.

Apart from that such agreements are a win-win for both the sides. It brings large business contracts, anchor clients and sustained revenue in a slowdown market, as well as helps late entrants, to scale up their BPO operations.

Companies interested on the buying side are the usual suspects, the bigger, top tier firms, like Satyam, Wipro etc that have been speculated to have evinced interest in some captives already.

But interestingly, the candidates on the selling side may not be the obvious ones.

It could actually be the non-financial US captives from sectors like retail etc where stability is not an issue, that may spark interest from Indian companies for their IT and BPPO operations.

"At these times, companies in the US are re-looking their global operations. The slowdown may accelerate some action in non-financial sectors. Also in spotlight would be the non-R&D centres with less than 200 employees or so. R&D centres with core IP work would not be sell-out candidates and if so acquisition is possible only in sub-50 employee bracket," Natarajan conjectures.

So, there could be more twists in the captivating story of sell-outs, than what meets the eye.

Wait and watch.