The new Czar

With KV Kamath to take over as chairman of Infosys in August, here's a closer look at the company, post Narayana Murthy, the visionary leader

An institution that started 30 years ago, that has come to define Bangalore, is now in transition.

Moulded by the man who was later to become one of the most iconic figures in the IT industry, Infosys now stands at a transitionary stage a change in power that would impact Bangalore in many ways.


KV Kamath, Infosys chairman

On April 30, 2011 Infosys put six months of speculation to rest by announcing that ace banker KV Kamath would succeed Narayana Murthy as the chairman of the board of directors at Infosys.

Even as the industry is experiencing slight tremors thinking of whether KV Kamath will be able to don the mantle of responsibility at Infosys with the same ease, Mid Day does a ground check on what Bangaloreans think of the change.

Innovative
Come August and many would be expecting a dynamic change in Infosys as soon as the successful banker takes over. Shareholders and investors areu00a0 wondering what lies ahead, meanwhile employees are gearing up for the exciting journey. Rajeev Mathew, a software engineer believes, "The organisation has built a strong set of leaders that will be able to push the company forward.
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Also Narayana Murthy being around as a mentor will be a big boon for the new leadership that is coming in. But the change is sure to bring in a new outlook and some process changes." Many industry experts are studying market reactions and have recorded a positive surge.
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Industry expert Venkat Goli explains, "It is a good sign for the outside world as it brings in a sign of stability and confidence that Infosys is willing to exhibit as it marks a change from entrepreneur-led chairmanship to a professional being chosen to be the chairman. It's a period of consolidation/holding for Infosys. It will slowly transition to a set of professional managers who will take it Infosys Level 3.0 as internal analysts call it."

Kumar V Jahgirdar, member of national stock exchange of India who has been tracking the industry for over 20 years claims that Narayana Murthy's void cannot be filled by anyone. "He has brought in a lot of professional ethics with him, but Kamath is in no way inferior.

He has proved his worth during tough times and is highly rated in the international markets too. A short term tremor has been experienced in the market and the moment investors are disappointed," he explains.

Frustrated
For over a decade, Infosys has been known as a conservative and a promising company. The resignation of Human Resource Director Mohandas Pai came as a big blow for the country's second largest IT company in April. This sure left a negative impact on the market and amidst this came the announcement of the new chairman.

How has the market received this? "The market hasn't received the news very well. Narayana Murthy was the face of the company and he led from the front.

Now that he is moving on, this is a sign of something disturbing for investors. Markets are not very confident and there is a lot of ambiguity now," claims Manoranjani Girish, a market analyst.

While Tata Consultancy Services (TCS) registered a 31.1 per cent jump (Q4 FY'11), HCL Technologies posted 33 per cent (Q3 FY'11) jump. On the other hand, Infosysu00a0 recorded 13.6 per cent growth in net profit, whichu00a0 never quite matched the market expectations.

The biggest challenge for KV Kamath would now be to improve on the current situation. "Their profitability isn't good. They have been market leaders but now, compared to their peers, the company isn't doing that well. They are not aggressive enough.

They have a lot of cash on their balance sheets and there is no future revenue growth. The market has been expecting them to make international acquisitions, but instead they've been retaining cash in the company, which hasn't even been put to productive purposes. A majority of investors hence think that the company lacks direction," says Girish.

Many analysts believe that the foreign exchange fluctuations have negatively impacted the markets and Infosys' position too. "While Murthy may have been the visionary leader of Infosys, to imply that the industry cannot accept a new face as its leader, is to discredit the diligence and dedication of several people who made equally significant contributions towards the success of the company," says Nikhil Parakh, a software engineer.u00a0
Shift
The change also means that a new chapter in the Infosys story is about to begin. With industry expectations soaring high, every move of KV Kamath will now shape the industry into what it will look like, 10 years from now.
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Rahul Raj, a techie explains, "India is an emerging market and the demand for software services is strong. The company should be able to ride this wave for the next decade." Many IT professionals believe that Murthy has given what he had to the industry and now it is time to shift and steer ahead. "IT companies are typically not driven by a single cult of personalities.
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If a company like Microsoft could seamlessly transition from the magnanimous Bill Gates to the then lesser known Steve Balmer, I see no troubles for Infosys," says Parakh.

The big question is, whether the market is willing to accept the change, and if Kamath will be able to live up to the expectations? Market expert Haleem Khushro is positive that the market is willing to accept this change.
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"Kamath has proved himself, although it will be difficult for him to break through and bring in a world of change with the old members still existing in the board. Investor sentiments have been affected by 30 per cent."

Irreplaceable
Narayana Murthy will take up the position of Chairman Emeritus effective from August 21, 2011 when Kamath will officially succeed him. While accepting the huge responsibility, the former ICICI chief KV Kamath had made a memorable statement.
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"I accept this responsibility with a deep sense of humility. Taking Murthy's position is not possible for anybody. One can only be Chair of the Board but one can never be a Murthy."


Kris Gopalakrishnan, Narayana Murthy, Nandan Nilekani and Mohandas Pai

His statement generated a lot of confidence within the rest of the board members and others shared the same sentiment while being positive about the new change. An insider from Infosys reveals that while Murthy has always been known as a thinking man, Kamath is the aggressive businessman who acts proactively.
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Mixed sentiments exist in the market as of now, but only time will tell if KV Kamath will be able to drive the company ahead through his successful ways.

KV Kamath
' Also Non-Executive Chairman of ICICI Bank
' Appointed as an additional director to Infosys Technologies Board of directors in May 2009
' Worked with the ICICI bank
' Named 'Businessman of the Year' by Forbes Asia
' Took ICICI to the international level
' Has a degree in mechanical engineering
' Has a degree from IIM, Ahmedabad

History
Infosys was officially registered as a private limited company on July 2, 1981 as Infosys Consultants Pvt. Ltd. Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D Shibulal, K Dinesh and Ashok Arora were the founders of the company along with Narayana Murthy. Raghavan's house in Matunga, Mumbai was registered as the company's official address.

Murthy apparently borrowed $250 from his wife to start the company. Murthy's wife Sudha, had saved this money without his knowledge. In 1982, Murthy bought a small house in Pune, the rooms of which became the first office of Infosys. In 1983 Infosys got their first client, MICO, in Bangalore and Murthy moved there.

Later he rented another house there for his family and one more that became the headquarters of the company. Later, Nilekani along with his wife joined them at their house in Bangalore.

CHANGES
Infosys Ltd inducted four new directors to the board, including three from the company and a renowned American businesswoman.
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Company's chief financial officer V. Balakrishnan and senior vice-presidents B.G. Srinivas and Ashok Vemuri have been appointed executive directors of the re-constituted board, which will be headed by K.V. Kamath as executive chairman.
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The US-based Ann Fudge will join the board as an independent director from October. She is a non-executive director at Unilever, Novartis AG and General Electric (GE) Co.
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'The board of directors accepted the recommendations of the company's nominations committee to appoint the three senior executives of the company and Fudge as additional directors,' the company said in a statement.
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EMOTIONAL
Infosys' founding chairman and chief mentor N.R. Narayana Murthy turned nostalgic last Saturday as he presided over his last annual general meeting. "My role as chairman of the board concludes on August 20, 2011, the day I reach the age of 65.

This is in keeping with the policy I laid down in 1981," said Murthy. "It is not easy for me to deliver my last address at this forum. As I speak, a mosaic of images from the past whiz through my mind. The list seems endless and it would be difficult to narrate them all today," he added.
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Noting that his three decades long journey with the company had been an integral part of his life, Murthy said he had been the number one actor in every major decision taken so far.
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"I have rejoiced at every significant milestone of the company. I have commiserated in every false step that was taken.

The best analogy that I can think of for this separation is that of one's daughter getting married and leaving her parent's home.
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Yes, the parents will be there when she needs them and they will be happy that she is starting a new life in an exciting new environment," Murthy said.