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May 3, 2005
Mail Stop 4-9
Vikram Talwar
Chief Executive Officer
ExlService Holdings, Inc.
350 Park Avenue
New York, NY 10022
Re: ExlService Holdings, Inc.
Amendment No. 2 to Registration Statement on Form S-1
Filed April 15, 2005
Registration No. 333-121001
Dear Mr. Talwar:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. Please note that we will address your April 22, 2005 amended
application for confidential treatment in a separate cover letter.
Our Business-Page 1
2. We note your response to previous comment 6. Upon reviewing
your
supplemental support we note that NASSCOM ranks only those
companies
that are members of their organization. If you intend to refer to
yourself as a leader in the industry based on the NASSCOM revenue
ranking system, please disclose that the ranking is limited to a
pool
of other industry players that are NASSCOM members.
Supplementally,
please advise us as to the membership requirements of NASSCOM and
as
to the number of companies that provide similar services that are
not
members of NASSCOM and not included in the ranking.
Risk Factors, page 5
3. We have reviewed your revisions in response to previous comment
10. The comment was meant to elicit greater balance in the
summary
section, in light of your extensive disclosure regarding your
competitive strengths and your business strategy going forward.
However, your revisions appear to repeat the minimal disclosure
found
under the heading, "Competitive Weaknesses" found on page 3 rather
than provide overall balance to the summary section. Please
revise
to expand your disclosure here regarding the most material risks
facing purchasers in the offering. For example, we note that a
large
portion of your revenues are derived from contracts that are
terminable at will and that your largest shareholders will
continue
to exert significant influence over your operations following the
offering. Please revise to discuss these risks and expand your
existing disclosure to briefly explain the risks currently listed.
Substantial future sales of shares of our common stock...page 20
4. We note your response to previous comment 14. Your disclosure
that substantial amount of common stock are subject to lock-up
agreements that expire in 180 and 360 day periods implies that no
sale of those shares will occur prior to the expirations periods
under any circumstances. In light of this disclosure, please
revise
to provide investors with a complete picture of the risk,
including
that underwriters could waive the lock-up provisions at their
discretion prior to the expiration dates. Please also
supplementally advise us as to the percentage of your stock,
including that held by Oak Hill Partners, that will be subject to
the
lock-up agreement.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Revenues, page 29
5. Where you discuss the factors that contributed to your growth
in
revenues from 2003 to 2004, please revise so that your disclosure
is
consistent with your disclosure under "Results of Operations."
Specifically, it appears that $20 million of the increase is the
result of providing services to certain clients for an entire year
rather than a partial year.
Executive Compensation
6. Please revise the table to reflect the options granted to Shiv
Kumar in 2004.
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
You may contact Jamie Webster at 202-551-3446 or Steven
Jacobs,
Branch Chief, at 202-551-3403 if you have questions regarding
comments on the financial statements and related matters. Please
contact Charito A. Mittelman at 202-551-3402 or me at 202-551-3694
with any other questions.
Sincerely,
Owen Pinkerton
Senior Counsel
cc: John C. Kennedy, Esq. (via facsimile)
Valerie DeMont, Esq. (via facsimile)
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Vikram Talwar
ExlService Holdings, Inc.
May 3, 2005
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