In Po­laris sale, some na­tional pride gets eroded

Hindustan Times (Patna) - Live - - Business - N MAD­HA­VAN

WHEN US-BASED, Nas­daq-listed Vir­tusa Corp said last week that it would ac­quire a con­trol­ling 53% stake in Chennai-based Po­laris Con­sult­ing & Ser­vices in a deal val­ued at around $350 mil­lion (`2,300 crore), it brought back mem­o­ries of how an­other fine In­dian com­pany, iflex so­lu­tions, was ac­quired in 2005 by Oracle in a $1.5 bil­lion deal , when it aquired 61% for an es­ti­mated $909 mil­lion.

Both iflex and Po­laris have com­mon roots in a strong eq­uity and busi­ness re­la­tion­ship with Cit­i­group, and both have built prod­ucts and so­lu­tions when In­dia’s soft­ware industry was largely fo­cused on ser­vices. Strangely, both com­pa­nies have lost their of­fi­cial In­dian iden­tity based on own­er­ship, of­ten con­sid­ered a mat­ter of na­tional pride linked to gen­er­a­tion of in­tel­lec­tual prop­erty.

Arun Jain, founder of Po­laris, and Ra­jesh Hukku, who started iflex, are not house­hold names in In­dia. But their com­pa­nies qui­etly be­came multi­na­tion­als when most of In­dia’s at­ten­tion was on Tata Con­sul­tancy Ser­vices, In­fosys and Wipro as the gi­ants hired tens of thou­sands of en­gi­neers to scale up through out­sourced ser­vices.

Kris Canakaratne, chair­man and chief ex­ec­u­tive of Vir­tusa, told me over the phone that he was grab­bing Po­laris not for the head­count (as can be com­monly be­lieved for US com­pa­nies en­ter­ing In­dia), but be­cause the two com­pa­nies had com­ple­men­tary strengths in terms of fo­cus ar­eas within bank­ing/financial ser­vices, ge­o­graph­i­cal reach and so­lu­tions en­abling them to jointly take on gi­ants in­clud­ing Ac­cen­ture and In­fosys. “We have very lit­tle over­lap­ping strengths,” Canakaratne said.

Vir­tusa was born only in 1996 and that too in Colombo, where the chair­man has his roots. It was a bit late by old-world IT stan­dards, and yet it has 120 clients from among the world’s top 500 en­ter­prises. With 7,000 peo­ple com­ing in from Po­laris, the en­larged Vir­tusa will have 18,000 em­ploy­ees, most of them in In­dia

Vir­tusa says that about 25% of Po­laris will con­tinue to be listed on In­dian stock ex­changes, which means some of the prod­uct pride may be in­tact for na­tion­al­is­tic In­di­ans.

But the ac­qui­si­tion of both iflex and Po­laris show that busi­ness is more im­por­tant than pride in the ever-grow­ing ex­panse of tech­nol­ogy. Th­ese com­pa­nies also show that quiet fo­cus can pro­duce a world-class com­pany, away from the me­dia noise.

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