MIDDLE-CLASS HERO

INFY CHAIRMAN NARAYANA MURTHY CALLS IT A DAY A torch-bearer for corporate governance, his high thinking-simple living philosophy and wealth creation and distribution model have made him as much a hero on Dalal Street as on Main Street
Asha Rai | TNN 

Bangalore has two types of people those who were plain lucky or prescient enough to buy Infosys shares when it went public in 1993 and those who didn’t. The ones who did found their life unexpectedly and dramatically altered by the money moun tain they were sitting on. The ones who didn’t, forever watched in envy and had their ‘how-I-missed-the-gravy-train,’ sto ry. The latter of course form a majority for in 1993 nobody thought much of a $9-million company started by a bunch of unknown techies who spoke a strange language: outsourcing, off-shoring, global delivery model.
To figure why Infosys caught the pub lic imagination like few others, one does n’t have to look further than the riches it brought lakhs of ordinary shareholders and its mainly middle-class employees. If you had bought 100 shares at the offer price of Rs 95 per share in 1993, today it would be worth Rs 2.30 crore. Given that Infos ys pays out 30% of its net profit, you would have earned a tax-free dividend income of Rs 5.76 lakh last fiscal on that modest Rs 9,500 investment.
The man who started it all, Nagavara Ramarao Narayana Murthy, who retires from the company this weekend, will go down in the annals of Indian business his tory as a champion entrepreneur, a man who connected Bangalore to Boston, a flag bearer for corporate governance, a vi sionary leader. But his ‘sex appeal’—a wrong phrase to perhaps associate with Murthy but a phrase that sums up best his attraction to the great Indian middle class —is that he showed it was possible to make serious money, legitimately and in a sin gle generation. That he used middle-class India’s favourite tool for social and eco nomic mobility—education—made him a hero they could appropriate and appreci ate. However, it is a moot point if Murthy would be eulogized and lionized to the ex tent he is, if he had merely built a great institution without at the same time mak ing sacksful of money for lots of people in the process. In post-reforms India, when the long-suppressed Indian instinct for making money found utterance wealth—sad, though it is—is seen as the primary validator of success. That Murthy lived simply and donates liberally, added to the mystique.
While the wealth creation part of In fosys has been well chronicled, a facet of Murthy’s which has been underrated is that of a marketer. He built the Infosys brand almost single- handedly with a zero budget. He figured very early that if he and his company did interesting things and stayed on the message, the burgeon ing print and electronic media, always look ing for a good story, would cover Infosys well. Hence all the innovations that In fosys introduced: employee stock option programmes, exhaustive annual reports in some umpteen languages, a fabulous campus that transported you straight to Silicon Valley, cycles for the young em ployees to zip around, got tremendous play
Ditto every time the media wrote about his frayed belts, him cleaning his toilet driving a lowly sedan, living in a middle class home even after he became a bil lionaire. Of course, all this wouldn’t have worked, if Infosys hadn’t delivered in the market place. Which it did, handsomely Revenues rose from $6-million to the over $6-billion in 20 yeas.
Most assumed that Murthy would head to a public office on leaving Infosys. That hasn’t happened. He did have an offer from former prime minister A B Vajpayee to join the government. He declined as he then felt Infosys—post the dotcom bust—needed him more. Of late he’s been steadfast in stat ing that at 65 he’s too old to hold a public post. He now wants to focus his energies on mentoring and funding the next gener ation of Indian entrepreneurs.
Murthy is retiring when the gloss is wearing off Infosys. Competitors are snap ping at its feet. Its long-held premium pric ing is under stress. People are wondering aloud if the company is suffering from pro moter’ exhaustion given that the baton is handed over only to those who started the journey with him in his home-office in Pune in1981.
The transition hasn’t been smooth. Pro tégés have left noisily. Distracted by the chairman and CEO search perhaps, the company has failed in the one aspect at which it was a superstar: communication So a company that grew topline from $4. billion by over 26 % to $6-billion last fiscal
and whose gross profits are 44% of rev enues is being portrayed as one which has lost the plot, much to Murthy’s annoyance
In fact, a true barometer of his legacy will be how well Infosys fares Monday on wards. If all the vaunted processes and sys tems he has built over the decades deliver without him at the top.
Of course there are those who believe that Murthy won’t be fading into the sun set anytime yet and that even as chair man emeritus his shadow will loom large on Infosys. But in an Indian culture where people are loathe to let go of their chairs well into dotage, that he’s officially walk ing in his mid-60s makes for powerful symbolism.

















NRN 'S TOUGH CALLS
Ta ta to GE
GE was the key customer of Infosys in 1994 accounting for around 40% of revenues. When GE asked for a lower billing rate, Murthy boldly opted out of doing business with it. The decision had huge financial implications for Infosys
Going public at sub-$10 m
Going public in 1993 when the company had only 250 people and less than $10 million in revenues was a call taken by Murthy. It was his vision and will that made the historic IPO
Infosys campus in Mysore
Infoys’ revenue was $122 million in 1999, the year it decided to set up a Glolbal Education Centre—which has no direct impact on revenue generation—in Mysore at an investment of over $400 million
Pulling the plug on Phaneesh
Phaneesh Murthy was the face of Infosys among US clients and he helped the company's revenues grow from $10 million to $700 million. Yet, when Phaneesh got mired in a sexual harassment case, NRN boldly let him go
Nasdaq listing
Nasdaq is a place where big boys play. Murthy took his company there in 1999 when it had a humble revenue base of around $130 million. It was about guts, building a global brand and setting benchmarks
Keeping the faith
Frustration set in around 1989/90 when many of the promoters wanted to bail out. Murthy told his associates, “If you guys want to sell the venture, there’s someone to buy it.” NRN. He offered to buy them all out with no money in the pocket but in the end persuaded them to stay. The rest is history