Indian software and outsourcing giant Wipro Technologies, is all set to buy the IT arm of Citigroup for around $127 million. Citi Technology Services deals with IT services and solutions of City group's Indian operations.

Citigroup would outsource all future infrastructure management contracts to Wipro. The Indian firm would also absorb about 2000 employees of City in its Mumbai and Chennai offices. It would provide all infrastructure and development related aids to the bank for six years, to assure revenue of at least $500 million.

While commenting on the deal, Citi's global technology head, Jagdish Rao said, "It could be twice as much over the next few years. As we face these challenges, there will be greater demand for moving more work to offshore locations." He said that the deal is aimed to achieve desired growth targets and it has nothing to do with ongoing financial crisis.

The joint CEO of Wipro's IT business, Girish S Paranjpe hoped that the deal would enable the company to provide efficient services to the banking sector.

He added, "While banking and financial services customers have done application development outsourcing, they have not really done much of infrastructure and business process outsourcing. This presents a huge opportunity for us."

It is recalled that CTS acquired the Indian BPO arm of Citibank for around $505 million in October. Wipro also acquired Info crossing in the US for $600 million in 2007. Experts believe that the industry would see more such acquisition in the coming times following the pressure of the global financial crisis.