'We will go for acquisitions for strategic reasons'

Q&A: Vineet Nayyar, Chairman, Mahindra Satyam

'We will go for acquisitions for strategic reasons'
K Rajani Kanth / May 24, 2011, 0:33 IST



In just two years after taking over Mahindra Satyam (the brand identity of Hyderabad-based information technology outsourcing company Satyam Computer Services), its parent company Tech Mahindra is looking at inorganic growth to take Satyam, which it had nursed back to health, to do a marathon. Mahindra Satyam Chairman Vineet Nayyar shares with K Rajani Kanth the company's mergers and acquisitions strategy, investment plans and new verticals that show promise for the future. Edited excerpts:

How has 2010-11 been?
I think it has been a good year. We had indicated earlier that the company was almost mortally wounded when we took it over. Like any other patient, it was in the ICU for a while. I do believe that phase is over and (the patient) is now convalescing.


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In the beginning of the year, our Ebitda (earnings before interest taxes, depreciation and amortisation) was four per cent. It went up to six per cent and has now gone up to 13 per cent. We are satisfied with the pace and the growth in the company. We are also putting up new buildings and structures in Hyderabad for our new employees for new projects which are coming in. So, by and large, the progress is satisfactory. My personal feeling is that the performance is much better than I expected.

What is the investment that is being infused into creating new infrastructure?
Capital expenditure for our Hyderabad and Chennai campuses is between Rs 300 crore and Rs 400 crore. In our Hyderabad SEZ, spread across 26 acres with a built-up area of 400,000 sq ft, the first tower has come up and 4,000 associates have already moved in. We have started working on the next tower too, which will accommodate another 4,000 employees. We are building a large campus in Chennai and expect the Phase-I to be inaugurated in a few months. Ultimately, we will put in about 8,000 employees in Chennai. But, to begin with, there will be 3,000 to 4,000. In addition, we are thinking of putting up two towers in Visakhapatnam. The planning is done and work will start shortly.

Mahindra Satyam has Rs 2,753 crore cash and bank balances as on March 31, 2011. How are you planning to utilise it? Are you looking at acquisitions?
It's our careful husbanding that has kept this money available to us. If an opportunity presents itself, we are always looking for acquisition deals. But we do acquisitions not for purely growing the company but for strategic reasons. To get into areas where we are not present. It will obviously be technologies .. that’s where we are in. The possible size of such deals depends on the opportunity. It could be a larger deal or a string of pearls. The cash is available with us.

Your rivals are already making big strides on the cloud computing. What about Mahindra Satyam?
We already have a special task force on cloud computing. In fact, we are already doing it. Cloud has just started, so how it will evolve globally we don’t know. People do believe there is a lot of potential for it. We are doing it, and if an opportunity presents itself, we will exploit it.

What will be your focus for the next two years?
It will be on segments that we have been specialising in. Media, manufacturing, engineering, and banking and finance are the verticals we are in and these will be the areas that we will be heading for.

China’s love for sanskrit is not without motive

The New Indian ExpressFirst Published : 18 May 2011 10:47:00 PM ISTLast Updated : 17 May 2011 11:21:56 PM IST

It is almost two millennia since Sanskrit went to China through Buddhist scriptures carried from India by Chinese pilgrims like Fa Xian and Xuan Zang (known in India as Huien Tsang). The language came to be called ‘Fan Wen’ in Chinese and was extensively used in ancient Chinese classics and Buddhist literature. By the advent of the medieval period in India’s history, China had become a treasurehouse of Sanskrit manuscripts. In an article in the ‘Journal of the Royal Asiatic Society’, famous Indologist Max Mueller acknowledged: “Being myself convinced of the existence of old Indian MSS in China, I lost no opportunity during last five and twenty years of any friend of mine going to China to look out for these treasures, but with no result.”


After decades of unconcern, communist China seems to have all of sudden woken up to revive its ancient ties with India. After marketing Sa Dingding, who won the BBC Radio 3 Award for World Music in the Asia Pacific category in 2008 as the country’s first Sanskrit-singing pop icon at last year’s Shanghai Expo, Beijing’s Peking University has now launched an ambitious programme to train more than 60 Chinese students in Sanskrit.

The avowed objective of this newfound love for Sanskrit is to create a team of researchers to translate hundreds of manuscripts that have been found in Tibet and other centres of Buddhism in China. But the political imperative of the communist regime’s need to boost its acceptance among the Buddhists, who account for 21 to 30 per cent of China’s population, cannot be missed. Especially at a time when their tallest leader, the Dalai Lama, has announced his retirement from public life. As if to underline the message, China’s official news agency Xinhua reported last week that the remains of the legendary Hiuen Tsang will now be available for public worship

Hope for victims of NRI marriages

The New Indian ExpressFirst Published : 18 May 2011 10:46:00 PM ISTLast Updated : 17 May 2011 11:18:45 PM IST

The Supreme Court has given a ray of hope to Indian women married to non-resident Indians whose marriages are on the rocks. In a path-breaking judgment on Monday, the court has given relief to a woman, who has returned to India with her child after she was thrown out of her husband’s home in the US. She approached a court in India which, taking into account her distress, her child’s future and the fact that her husband had married again, granted her the child’s custody. But following her husband’s complaint that she had ‘abducted his child’, a court in California issued a red corner notice against her. When the case reached the high court, it set aside the trial court’s verdict on the ground that they were US citizens and, therefore, the court had no jurisdiction.


In such cases, the courts go by the ‘doctrine of comity of courts’ whereby they respect each other’s jurisdiction. Had the apex court also followed this, it would have been forced to treat the mother as an ‘abductor’. However, the fact is that she was a victim, who did not have the wherewithal to fight her husband and had, therefore, escaped to India. In most marital disputes, the custody of minor children is given to the mother, because she is in a better position to bring them up. Usually, the court also allows the father periodic access to their children till they attain maturity and can decide on their own whether to stay with the father or the mother or independently.

In the instant case, the Supreme Court was guided solely by humanitarian considerations. Though there is a craze for NRI grooms among some communities, a good number of such marriages fail, mainly because of adjustment problems. Whatever be the reasons for the failures, the victims are almost wholly the transplanted wives. The problem is so acute in Punjab that organisations to fight for the victims of NRI marriages have been sprouting. The Supreme Court’s verdict is a shot in the arm for such initiatives

A demented Pasha dangerous for India

The New Indian ExpressFirst Published : 18 May 2011 10:45:00 PM ISTLast Updated : 17 May 2011 11:14:37 PM IST

Just as New Delhi had treated somewhat casually Pakistan foreign secretary Salman Bashir’s post-Abbottabad fulminations, including the outrageous assertion that the issue of bringing the 26/11 perpetrators to justice was outdated, it has again tried to downplay ISI chief, Ahmad Shuja Pasha’s hostile remarks of having identified the sites which Pakistan will target if India undertakes an Abbottabad-type operation. Pasha has even said that Pakistan’s response has been rehearsed although it is not clear what he meant. What is clear is that our neighbour is behaving in a more demented fashion than ever before.


Even if this palpably abnormal conduct is the result of the disorientation caused by the US raid on Osama bin Laden’s lair, India cannot afford to lower its guard. The need to be careful is all the greater because it was speculated immediately after Osama’s death that Pakistan might indulge in some kind of military adventurism against India to offset the humiliation it has suffered before its own people. Besides, there is every possibility of the ISI urging its terrorist clients to step up attacks on India, which it apparently wanted to do during the cricket world cup matches. It is unfortunate, therefore, that the various post-26/11 proposals to deal with such threats are yet to be implemented, with the failure to set up a national counter-terrorism centre the most regrettable.

It is undeniable that India’s habit of waking up too late to external threats has a long history — from Jawaharlal Nehru’s futile courtship of Zhou Enlai during the Hindi-Chini bhai-bhai days to Shivraj Patil’s “spectacularly inept” stint at the home ministry, to quote WikiLeaks, which left the country open to terror attacks virtually every month on markets, temples and trains. Given the frenetic manner in which Pakistan is building up its nuclear arsenal — it already has more warheads than India — and its refusal to adhere to the no-first-use doctrine, India cannot afford to brush aside the tirades of the Bashirs and Pashas as the ranting and raving of frustrated individuals

The prince’s diaries miss the point

Ravi Shankar EttethFirst Published : 14 May 2011 11:12:00 PM ISTLast Updated : 15 May 2011 01:25:00 AM IST

Is Rahul Gandhi the Abhishek Bachchan of Indian politics? Both big flops, they keep getting big roles. However, Abhishek has worked with many directors, Rahul has only one—Digvijay Singh. Abhishek also has a beautiful wife, while Rahul has Digvijay Singh. Abhishek is versatile; the smouldering cop in Dhoom2, the brooding desi Michael Corleone in Sarkar, the adorable rogue in Bunty aur Babli, the earthy, swaggering tycoon in Guru. But Rahul? A sleepover in a farmers hut when starvation grips rural Maharashtra; a sleepover in a Dalit farmer’s hut to try upstage the BSP; a sleepover in a farmer’s hut to give British Foreign Secretary David Millbrand a taste of the bucolic life; a sleepover in a farmer’s hut as Mayawati cracks down on agitators in Greater Noida.


To cultivate both farmers and fans, the constant gardener of zeitgeist needs to gauge popular appetites right. When Raavan flopped, Abhishek was devastated because he had “put his heart and soul into it.” Maybe the young Gandhi does too—but politics is not about heart and soul alone, it is about the brain as well.

So, what does this young man, whose good looks have failed to translate into charisma do? Like a schoolkid at a frat party, Rahul repeats his favourite party trick—he gives bodyguards the slip (by now renamed Rahul’s ZZZZZZZZ-Class Security), rides pillion on a mobike and lands up in Bhatta-Parsaul village in Greater Noida—where agitating farmers have been taken away by UP cops—for a pajama party in a farmer’s hut! True to script, Mayawati contemptuously arrests him—Varun or Rahul, all Gandhis are the same in UP. “Our slogans come from the villager’s hut,” is Rahul’s warcry, “and not from TV studios.” Meanwhile, TV cameras show the ‘arrested’ Rahul driving away smilingly in the backseat of a Scorpio as the camera pans out. It is a bizarre male version of The Princess Diaries.

The lessons of history are learnt in the solitude of introspection and application. Before M K Gandhi took on the British Empire, he had already experimented with satyagraha in Durban. Gandhi understood the mythos of eternal India; the acceptance of destiny and passivism as a virtue, which he turned into a powerful new weapon called non-violence. Unlike Rahul, the Mahatma was a natural politician who innovated ways to connect with people—he walked for miles to Dandi and Noakhali, he rode second class in trains and went on fast in public to enforce his will. Rahul is presumably borrowing passages from the dog-eared book of Indian politics called Gandhigiri; disappearing into tribal villages in Orissa, hitchhiking on a train, partaking of the spartan hospitality of the Indian poor. Unfortunately, all this comes across as unreal and unidimensional; the reason why the current state election results are a profound rejection of Rahul’s politics.

Both Rahul and the Congress should realise that the Crown Prince simply doesn’t make the cut. The nephew hasn’t even inherited his uncle’s scorching aggression—when the Janata Party arrested Indira Gandhi in 1978, it was Sanjay Gandhi’s public belligerence and organisational skills that made Morarji Desai look like a wimp. Going by the poll wind in Bengal and Tamil Nadu, the Virgin Queen of Uttar Pradesh is likely to sweep young Rahul off his feet the way a duststorm will. Meanwhile watch out for Bol Bachchan, all set to hit theatres this year.

ravi.shankar@newindianexpress.com

The big winner? Not Mamata or Jaya

T J S GeorgeFirst Published : 14 May 2011 11:13:00 PM ISTLast Updated : 15 May 2011 08:55:10 AM IST

Election Commissions and voting machines can only tell us a superficial kind of truth. The substantive, eternal truth is that those who win are not always the winners, and those who lose are not necessarily the real losers. Never was this eternal truth more dramatically brought out than in the latest round of assembly elections in five states. Look behind the headlines to know who are the real winners and losers.


The biggest winners are not Mamata Banerjee and Jayalalithaa. The size of their victory margins is as sensational as the comprehensiveness of their adversaries’ defeat. This does give their triumph a historic dimension. But take another look, and we can see that they won primarily because their opponents had to be defeated.

Bengalis had been longing for a change, considering the cell rule enforced by communist rulers in the countryside, the steady increase in poverty levels and the misery of everyday existence. But they did not know where to turn to. The Congress had committed harakiri in Bengal, as in several other states, and the BJP was always an alien idea. Mamata’s steps were tentative in the early phases, but after she joined forces with popular emotions in the Nandigram movement, people found their saviour. Every other vote she won was a vote cast against the ruling government.

Very similar was the case in Tamil Nadu too. When the Karunanidhi Government turned into a dynastic ogre, utterly self-centred and utterly arrogant and utterly corrupt, the voters looked for an escape route. The only available route was Jayalalithaa. They had tried her out in the past and found her wanting. But they turned to her anyway because it was the only way to get the DMK gang out of the way. Jayalalithaa won because Karunanidhi lost.

Seen in that light, the biggest winner in this round of elections is V S Achuthanandan. By every known precedent of Kerala politics, he should have lost ignominiously because he was not only the incumbent, but his own party was against him. Instead, his personal popularity pulled the party through to an unprecedented performance. Technically, the Congress-led coalition will form the government and Achuthanandan’s Communist-led coalition will be in the opposition. But the difference between the two groups is so minimal that victory is as bad as defeat and defeat as good as victory.

Who are the biggest losers? No, not Buddhadeb Bhattacharjee and not M Karunanidhi, though their defeats have a humiliating ring about them. The really big losers in this election are two men who did not even contest—Prakash Karat and Rahul Gandhi. Their action was as disastrous as their inaction.

Prakash Karat knew first hand what was going wrong in Bengal and Kerala. Yet he did not lift a finger to correct the course in Bengal or to rein in the party’s capitalist-minded syndicate in Kerala. In fact, he sided with the syndicate. If he had advised the party to stand united under the mascot of Achuthanandan, his party would have returned to power comfortably in this election and probably the next one as well. Karat simply does not have the leadership quality his position requires.

In Rahul Gandhi’s case, what is in his favour is that no one expects anything constructive from him. But that does not mean that people expected destructive moves from him—like his making fun of Achuthanandan’s age, for which he received the most memorable verbal lashing in recent political memory, the “Amul Baby” tag. That one faux pas by Rahul must have got a chunk of votes for Achuthanandan. The Congress princeling made a couple of visits to Tamil Nadu, taking care not to meet his ally Karunanidhi. Nor did he do anything to put life back into the dead horse that is the Congress party in Tamil Nadu.

The big political story from this election is that the Congress party is losing ground across India. But don’t expect it to learn any lessons from this decline. That is the beauty of democracy—you don’t have to learn anything

Bhardwaj loses right to continue in office

The New Indian ExpressFirst Published : 17 May 2011 10:38:00 PM ISTLast Updated : 16 May 2011 11:49:46 PM IST

Karnataka Governor H R Bhardwaj is like a person who cannot be woken up because he is pretending to be asleep. His recommendation of president’s rule in the state is one more proof that he is unwilling to learn the basics of statecraft, raising questions about his competence to hold the gubernatorial post. Before sending the recommendation, which can evoke only derision, he should have turned the pages of recent history to learn that he does not enjoy any such power. Gone are the days when a governor could get away by dismissing an elected government, as in Kerala in 1959. No longer does any ambiguity exist about the governor’s role in situations in which an elected government’s majority is in doubt.


What has emboldened the governor to strike against the B S Yeddyurappa government is the recent quashing of the disqualification of 16 MLAs prior to the confidence vote it won in October last. The Speaker’s decision might have been questionable but, then, much water has flowed down the Kaveri since then. In any case, the new development does not give Bhardwaj any right to interfere in the functioning of the state legislature. If at all he had any doubt, he could have asked the chief minister to prove his majority in the House. In fact, he merely had to agree to the Cabinet’s request to convene a session of the House, where the Opposition could have moved a no-confidence motion, or a member could have asked for a ‘division’ on any Bill.

Instead of performing the constitutional duty of convening the House, Bhardwaj saw in the Supreme Court verdict an opportunity for petty politicking. There is the voluminous Sarkaria Commission report on Centre-State relations and several Supreme Court judgments, particularly the one in which the conduct of then Bihar Governor Buta Singh was condemned, which make the point as clear as daylight that it is on the floor of the House that the majority of a government is tested and not in Raj Bhavans. If Bhardwaj cannot understand this simple rule, he has no business to be in Bangalore