Vineet Nayyar, former vice chairman of Tech Mahindra, passes away at 85 (2024)

Vineet Nayyar, the former vice-chairman of Tech Mahindra, has passed away at 85. From starting off as a district magistrate to overseeing the turnaround of an Indian IT giant marred by scandals, Nayyar wore many hats in his lifetime.

Nayyar started his professional life as a district magistrate before he founded the state-owned Gas Authority of India. He eventually made his way up to the World Bank where he oversaw its infrastructure and energy divisions. Noting his managerial prowess in this time, Shiv Nadar, founder and chairman of HCL Technologies Ltd, prompted Nayyar to enter the IT services sector. Nadar offered him a job at HCL—first as managing director of HCL Corp., then vice-chairman of HCL Technologies and also the founder & CEO of HCL Perot Systems.

IT journey

It was in 1996 that Nayyar started his IT journey with HCL Perot Systems, a 50-50 joint venture between HCL Technologies and Perot Systems, as its founder and managing director. He had a topsy-turvy time there as he was embroiled in a bitter boardroom battle over the control of the company between HCL and Perot Systems with the latter even seeking his removal as chief executive over differences in the company’s functioning.

However, he oversaw the company going public three years after its founding in 1999 and steered its ship until 2005, two years after HCL sold its stake to Perot for ₹480 crore in what was touted as the biggest deal in Indian IT at the time.

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Nayyar was not new to challenges. While at 22, he oversaw the making of India’s biggest gas pipeline between Hazira in Gujarat to Jagdishpur in Uttar Pradesh as a government officer, another formidable challenge.

“Every situation has different characteristics. Diagnose what the problem is; go about it systematically; you have to have two-three priorities; plot the priorities as nobody can do everything together," said Nayyar on the ways he approaches problems, in an interview with Mint published in July 2009.

The former World Bank executive joined Tech Mahindra, formerly known as Mahindra British Telecom (MBT), in January 2005 as its vice chair, chief executive officer (CEO) and managing director (MD).

Revenue doubles

As of the financial year ended March 2005, two months after he joined MBT, the company posted $217 million in annual revenue. The same company, now rebranded as Tech Mahindra as of the financial year ended March 2007, saw its revenue more than double on a yearly basis to $649.9 million. Nayyar was at the helm of affairs when the company went public in August 2006.

It was then time for Nayyar to have arguably his life’s high, which was to revive a company marred by one of India’s biggest financial frauds.

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In the financial year ended March 2009, Tech Mahindra paid $582 million to buy Hyderabad-based IT company Satyam Computer Services, then the country’s fifth largest IT company, after a ₹7,136 crore accounting fraud by company chairman B. Ramalinga Raju led to his arrest and the passing of the company’s reins.

It is useful to know that during this time, Tech Mahindra and Mahindra Satyam were run as two different entities until the former completed the latter’s acquisition in June 2013 after announcing it in 2009.

The task of rebuilding Satyam now lay in the hands of Nayyar, who was the chairman of the Mahindra Satyam board and CP Gurnani, who was the president of Tech Mahindra when Nayyar joined the company, and now the whole-time director and CEO of Mahindra Satyam.

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In an interview with Mint in 2009, Nayyar outlined his immediate task in Satyam’s resurrection, which was to bring down the company’s non-core expenses which at that time, made up 26-28% of the company’s expenses.

Satyam lost accounts and its operating margins had never really crossed 3%. It dawned upon Nayyar and his close aide Gurnani that the company had to be brought back to health before the merger was completed. Tech Mahindra parent company Mahindra & Mahindra chairman Anand Mahindra claimed Satyam gave his company scale, size and export orientation as Tech Mahindra’s clients were largely domestic. Nayyar considered the deal a “match made in heaven."

Simplifying operations

One of the moves to rebuild the company was to reduce the operational layers, let go of people Raju had hired in excess to show his company had grown, and to build on the sales front which included regular conversations with clients.

At the time the acquisition was announced, Satyam had revenue of $985 million. Four years later, in the financial year ended March 2013, when the acquisition was completed, the company reported ₹76.9 billion in revenue, up 20.3% from the year ago period. Tech Mahindra itself, reported ₹67.9 billion in annual revenue during that time.

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“Vineet Nayyar established TechM as one of the top ten Indian IT services companies. Being at the helm, he dominated the growth of the Indian IT services industry. He is one of the leaders who was prevalent at a time when Indian IT services went through a ‘hockey-stick curve’ between the late 90s and 2000s," said Shriram Subramanian, founder of InGovern Research Services.

Former Tech Mahindra CEO CP Gurnani listed the "powerful leadership lessons" he picked from Nayyar. The first of these he listed as "bold is beautiful"—making difficult decisions with clarity and grace.

"The acquisition of Satyam is the biggest example. And then, there are the multiple joint ventures. I learnt that fearless, right decision-making not only helped set good precedence but gave an extra shot of confidence to every member of the team," he wrote.

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Published: 16 May 2024, 01:21 PM IST