Citigroup has shortlisted three bidders for its business process outsourcing unit after the first round of bidding.

The sale of the BPO business, run by Citigroup Global Services (formerly e-Serve), is expected to fetch around Rs 3,200 crore for the group. At this price, it will be the largest deal in the domestic BPO space.

The shortlisted bidders are Firstsource, WNS and Genpact, said sources close to the development. Others who had expressed initial interest, including IBM, Automatic Data Processing, Infosys [Get Quote], EDS, Capgemini and private equity players such as Blackstone and General Atlantic, are no longer in the race.

When contacted, a Citigroup spokesperson declined to comment. Investment bankers, however, said Citigroup might not sell its entire 100 per cent stake in the BPO business, identified as a non-core area, at one go. "In all probability, the group will sell 80 per cent now to one of the successful bidders. The remaining 20 per cent will be sold at the time of listing the company," they added.

Citigroup Global Services, which changed its name from e-Serve in November, employs close to 8,000 people in Mumbai and Chennai. The group consolidated its holding in the BPO company to 92.26 per cent three years ago from 44.4 per cent. Currently, it is a wholly-owned subsidiary of Citigroup.

The largest major deal in the BPO space so far was when Blackstone recently bought Intelenet from Barclays and HDFC [Get Quote] for Rs 840 crore.