TCS, India’s largest information technology (IT) service provider, had bagged the contract in 2011 for a period of 15 years through its UK-based business process outsourcing unit Diligenta.

Diligenta was given the administration responsibility for 3.2 million policies of Friends Life - a provider of pensions, investments and insurance - with the agreement being effective from March 1, 2012.

“Aviva has its own vendor, which is WNS. Due to this, there is a possibility that Diligenta loses its contract. However, there is also an equal possibility that it (Diligenta) may take over WNS as a vendor and I also see a third possibility where both the vendors will continue independently. So there is quite a bit of uncertainty about the future of this contract,” said an analyst with a local brokerage.

TCS scrip ended in the red zone on Tuesday. The shares closed at Rs 2,656 apiece on the BSE, down 1.38 per cent from the previous close on a day when the BSE IT index was down by 1.48 per cent and the overall Sensex lost 115.61 points to close at 28,444.01.

Most analysts were of the view that although there were some chance of TCS losing the contract, it was too early to draw any conclusion. An email questionnaire sent to TCS went unanswered.

“The contour of the deals are not known at present, so its difficult to say how fast or slow things will change,” said the analyst with local brokerage.

“Typically, in such large deals (Aviva and Friends Life) for at least three years there is no change, as first the legal aspect of it is put in place and then the operational integration happens. So all this takes time,” said Milan Sheth, partner (advisory services) at Ernst & Young.

Even if the contract is lost by Diligenta, it will not really swing the needle in terms of the impact on the company's revenue stream, said analysts.

A deal of that size for a span of 15 years comes to $150 million-a-year revenue, which means about $40 million a quarter. Given the revenue stream of TCS, this is perhaps just one per cent of the total quarterly revenue the company churns. In the quarter-ended September, in dollar terms, TCS reported consolidated revenues of $3.93 billion.