‘Offices won’t disappear; gig workers never a threat’
As Bengaluru-based IT services firm Happiest Minds goes for its IPO next week, the company’s Executive Chairman ASHOK SOOTA says taking a company public early not only strengthens corporate governance and transparency but also helps give returns to future shareholders when growth is certain. Soota and the management team spoke to Sai Ishwar and Bibhu Ranjan Mishra on the company’s focus areas, hiring plans, and timelines to hit pre-covid levels of growth. Edited excerpts:
Do you think this is the right time to go for an IPO? Or was it planned earlier?
It was not planned. We actually thought of it bang in the middle of the lockdown. We realised it is an uncertain market. We could see that what we would lose in growth for this year would be made up in profitability that is visible in our first quarter numbers. Secondly, markets also have a way looking to the future because they are reflecting the future. If there is any one industry that has bounced out of difficult times and global recessions, it is IT. The markets began to respond to the results where you could see that the sector that was certainly doing well was the IT sector. We took a conscious decision and what has happened since is only validated the basis for our decision.
Some believe that by remaining private, it is a lot easier to take strong decisions and execute those to drive growth?
Is it not so?
I don’t think the public scrutiny is a concern to slow you down. It brings out your corporate governance and transparency, and disclosure helps everybody and doesn’t hinder the company. What people have been doing is that they are deferring IPOS to raise a lot of money through large private-equity groups and attract multi-billion dollar valuations before going public. Now, what has happened is, the scope to give rewards to your new shareholders is already sucked out. This can be seen in recent IPOS of Us-based startups trading at significant discounts. It is far easier to give returns to your future shareholders when you know you can grow at a certain rate, and keep the profitability up to levels that we are projecting.
How has the demand and business environment changed after the pandemic?
IT and services businesses are resilient. And, they are much more adaptable to change. And as you see that technology and business disruptions are probably taking place at a much more rapid pace than what it was earlier — whether it is advent of artificial intelligence, drone, analytics, and process automation. Within that context, I think that customers continue to reimagine their business. They need to consolidate and optimise post-covid environment and additional revenue generating opportunities.
Is the offshoring model under threat because of remote working model or emergence of gig workers?
If there is gig economy, we will have gig workplace. We have been working from home from the day we started the company. It is fine if it is a small team, but for a large pool of workers, you have to bring them into office. So, I don’t think offices are going to disappear at all, and I don’t think the gig workers are ever going to be a threat to us. Anybody else who comes into the informal sector, it is never a threat. They are bringing their own skills and it all adds to the larger market.
What are the hiring plans for the year?
This is not a high growth year so we can’t hire tonnes of people. However, we are continuously hiring. We are seeing resurgence in demand in (areas like) data science, big data, and cyber security. We will do it in a phased manner.
The economy has fallen the most in 40 years and the overall sentiment is very low. Can technology play a role in growth?
We are still one of the fastest growing markets, technology-wise. You end up adopting some of the more efficient technologies when you are a late entrant. The startups activity has not slowed down. We are probably the top 2 or 3 in terms of being a hub for start-ups, which is also driving technology. I’m not concerned about how the economy will pick up as it has the ability to bounce back. Let us just hope there is another stimulus package and other measures.