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India IT Services
Visa Checks: Increased
Scrutiny, Some Delays but
No Major Disruptions
Quick Comment: Concerns about visa issues have
been at the forefront over the last few weeks. A
subpoena issued to Infosys in the US and recent media
reports on companies being removed from the Business
Executive Program (BEP) have heightened visa-related
risk perception for India IT services companies. Our
checks with companies reveal that US consulates have
increased scrutiny for all companies, and a few smaller
IT companies have seen delays in some instances.
However, overall acceptance rates are unchanged,
leading to no material business impact.
What is BEP? BEP is an express visa program for US
work visas. Under BEP, to expedite the visa process,
companies with large visa requirements are entitled to
priority processing, and we understand the process is
audited on a regular basis. Even a single exception
found during an audit can lead to an immediate
suspension of the company from the BEP. Suspensions
can be reversed after a full due diligence if the violations
are trivial (documentation oversight, minor error, etc.).
What's new: Indian media (Business Line) have
reported instances of large IT companies being
suspended from the BEP by US embassies (media
reports highlight IBM, TCS, HCLT, Cognizant). The
reports have heightened investor concerns about visa
issues for India IT companies. We understand that some
US embassies found exceptions (only one instance in
some cases) with a few companies toward the end of
2010 in audits. However, TCS and HCLT have
confirmed that they have been reinstated in the BEP.
Maintain In-Line industry view: We believe the reports
highlight a dated issue that has since been resolved for
the companies in our coverage universe. India IT
companies have taken steps to ensure, among other
things, that they submit all necessary documents with
the visa application to avoid any delays/rejections.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India IT Services
Visa Checks: Increased
Scrutiny, Some Delays but
No Major Disruptions
Quick Comment: Concerns about visa issues have
been at the forefront over the last few weeks. A
subpoena issued to Infosys in the US and recent media
reports on companies being removed from the Business
Executive Program (BEP) have heightened visa-related
risk perception for India IT services companies. Our
checks with companies reveal that US consulates have
increased scrutiny for all companies, and a few smaller
IT companies have seen delays in some instances.
However, overall acceptance rates are unchanged,
leading to no material business impact.
What is BEP? BEP is an express visa program for US
work visas. Under BEP, to expedite the visa process,
companies with large visa requirements are entitled to
priority processing, and we understand the process is
audited on a regular basis. Even a single exception
found during an audit can lead to an immediate
suspension of the company from the BEP. Suspensions
can be reversed after a full due diligence if the violations
are trivial (documentation oversight, minor error, etc.).
What's new: Indian media (Business Line) have
reported instances of large IT companies being
suspended from the BEP by US embassies (media
reports highlight IBM, TCS, HCLT, Cognizant). The
reports have heightened investor concerns about visa
issues for India IT companies. We understand that some
US embassies found exceptions (only one instance in
some cases) with a few companies toward the end of
2010 in audits. However, TCS and HCLT have
confirmed that they have been reinstated in the BEP.
Maintain In-Line industry view: We believe the reports
highlight a dated issue that has since been resolved for
the companies in our coverage universe. India IT
companies have taken steps to ensure, among other
things, that they submit all necessary documents with
the visa application to avoid any delays/rejections.
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