Narayana Murthy and Growth of Infosys

Infosys Technologies is one of the few Indian companies that has changed the way the world looks at India. 

No longer is India a land of snake charmers and beggars. It is now perceived as an economic giant to reckon with, bursting with brilliant software engineers and ambitious entrepreneurs. And Infosys is an symbol of India's information technology glory. 

Infosys has many firsts to its name: The first Indian firm to list on Nasdaq; the first to offer stock options to its employees. . . The company crossed $1 billion in revenues for the first time in 2004. TCS, however, was the first Indian IT firm to top $1-bn in revenues.Infosys is an organisation that inspires awe and respect, globally. On July 2, Infosys completed 25 years in existence. This is its amazing success story, illustrated by rare photographs.

The idea of Infosys was born on a morning in January 1981. That fateful day, N R Narayana Murthy and six software engineers sat in his apartment debating how they could create a company to write software codes. 

Six months later, Infosys was registered as a private limited company on July 2, 1981. Infosys co-founder N S Raghavan's house in Matunga, northcentral Mumbai, was its registered office. It was then known as Infosys Consultants Pvt Ltd. 

What was the company's starting capital? 

US $250. Murthy borrowed $250 from his wife Sudha to start the company. The front room of Murthy's home was Infosys' first office, although the registered office was Raghavan's home. 

Who were Murthy's six friends who joined hands to launch Infosys? 

Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D Shibulal, K Dinesh and Ashok Arora. 

Are all of them still the founding directors? 

Murthy is currently chief mentor and chairman while Nilekani is the chief executive officer and managing director. Gopalakrishnan, Shibulal and Dinesh are directors. Raghavan retired as joint managing director in 2000. He is currently the chairman of the advisory council of the N S Raghavan Centre for Entrepreneurial Learning at the Indian Institute of Management, Bangalore. Ashok Arora worked for the company till 1988 and left after selling his shares in the then unlisted company back to the other promoters. He moved to the United States where he now works as a consultant. 

 

The idea of Infosys was born on a morning in January 1981. That fateful day, N R Narayana Murthy and six software engineers sat in his apartment debating how they could create a company to write software codes. 

Six months later, Infosys was registered as a private limited company on July 2, 1981. Infosys co-founder N S Raghavan's house in Matunga, northcentral Mumbai, was its registered office. It was then known as Infosys Consultants Pvt Ltd. 

What was the company's starting capital? 

US $250. Murthy borrowed $250 from his wife Sudha to start the company. The front room of Murthy's home was Infosys' first office, although the registered office was Raghavan's home. 

Who were Murthy's six friends who joined hands to launch Infosys? 

Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D Shibulal, K Dinesh and Ashok Arora. 

Are all of them still the founding directors? 

Murthy is currently chief mentor and chairman while Nilekani is the chief executive officer and managing director. Gopalakrishnan, Shibulal and Dinesh are directors. Raghavan retired as joint managing director in 2000. He is currently the chairman of the advisory council of the N S Raghavan Centre for Entrepreneurial Learning at the Indian Institute of Management, Bangalore. Ashok Arora worked for the company till 1988 and left after selling his shares in the then unlisted company back to the other promoters. He moved to the United States where he now works as a consultant. 

 

25 years sheer determination, and growth 

In the last 25 years, Infosys has been growing and growing. 

Today, Infosys is India's second largest software exporter. It now enjoys a strong liquidity position with over Rs 6,000 crore (Rs 60 billion) in assets, including surplus cash. 

During 2005-2006, the Infosys internal cash accruals more adequately covered working capital requirements, capital expenditure and dividend payments leaving a surplus of Rs 1,612 crore (Rs 16.12 billion). 

As on March 2006, the company had liquid assets including investments in liquid mutual funds of Rs 4,463 crore (Rs 44.63 billion). This collectively makes the liquidity strength of Infosys at Rs 6,078 crore (Rs 60.78 billion). 

Where are these funds parked? 

These funds have been deposited with banks, highly rated financial institutions and in liquid mutual funds. Infosys last year derived an average yield of 4.48 per cent (tax free) from these investments. 

The company received Rs 647 crore (Rs 6.47 billion) on exercise of stock options by employees and cash equivalents including liquid mutual funds increased by Rs 1,612 crore during 2005-06.

India’s Most Respected Companies

"Respect for ourselves guides our morals; respect for others guides our manners.” – Laurence Sterne

Respect is a difficult thing to earn. It takes years of exceptional performance and exemplary behavior. And it can be lost because of a single crisis or a single misstep.

It was not merely the exponential growth, It was also the benchmarks the company set along the way — in long term vision, in ethical behavior, in professionalism, in sharing wealth with employees, and in the integrity of its founders — that made it one of India’s most admired companies. In the corporate world, it depends not only on the performance of the previous few years but also the flavour of the day.

According to the latest survey by Business World, the latter factor shows up strongly in our surveys every year. In the 1980s, fast moving consumer goods companies (FMCGs) as well as blue-chip steel and engineering firms took the top spots. In the early 1990s, two heavy industry firms — Tisco (now Tata Steel) and Telco (now Tata Motors) took the first two places. By the mid and late 90s, pharma and software had become the hot sectors. In 1999, for instance, Glaxo was the winner. And heavy industries and blue-chip engineering firms were relegated to lower rungs. FMCG fared even worse — it was just not seen as a sector that was setting the tone in the key parameters of business life. By the middle of the first decade of the new millennium, though, pharma had also started dropping down, while software held on to its top spot. Meanwhile, heavy industries were coming back to fashion — and companies such as Larsen & Toubro, Tata Motors and Reliance Industries took their place in the top 10 in most of the surveys.

What is amazing is that Infosys has held on to the title of BW’s Most Respected Company (overall) in every survey since it first won in 2001. Over the past decade, it has faced many challengers to its title, grappled with enormous competition in the market, seen three different people assume the managing director’s role, and struggled with a new world order and slowing growth. But it has continued taking the top spot.

While the survey results over the years show how easy it is to lose respect of your peers, it also shows that some companies have continued garnering respect over decades. So have some groups. Take Tatas, for example. Over three decades, the group has had between two to three companies in the top 10 in almost every survey. Tata Motors and Tata Steel may be playing second fiddle to TCS currently, but they have popped up in the top 10, and often the top 5 consistently. And Reliance Industries — despite all the problems it has faced including the bitter battle between siblings after founder Dhirubhai Ambani’s death — has remained in the top 10 since it first came into the survey.

Source: Business World