Power utility CESC Ltd's decision to acquire a controlling stake in business process outsourcing (BPO) firm Firstsource Solutions is expected to hike the company's debt burden as the new deal will be largely funded through fresh debt.

The new deal also marks CESC Ltd's second unrelated business diversification in the last five years. In April 2007, CESC had merged Sanjiv Goenka's loss-making retail firm Spencer's, which has so far failed to report a profit.

Now, CESC has offered to acquire 34.5 per cent stake in Firstsource via a preferential allotment for Rs 12.10 a share, and an additional 15 per cent stake in the BPO business for Rs 12.2 a share from existing investor ICICI. The Rs 400-crore-deal values India's fifth-biggest outsourcing firm at around Rs 800 crore.

CESC has also made an open offer to purchase 26 per cent stake from open market. This will take CESC's potential stake in Firstsource to 75.5 per cent, which will cost more than Rs 620 crore.

But, poor performance in the retail venture Spencer's has raised question whether CESC would be able to take advantage of its newest acquisition as Firstsource is a completely unrelated business for CESC.

Investors concerns reflected in the 15 per cent decline in CESC shares on Friday.