MumbaiOne hour ago
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- Licenses used to be given in 2-3 years to buy a computer
- In 1991, the company wanted to bring IPO, but many incidents obstructed
The founder of the country’s leading information technology (IT) company Infosys, NR. Narayana Murthy has made a tremendous disclosure. According to him, in 1990, the company got an offer to buy for only Rs 2 crore. However, this offer was turned down by himself and his co-founders. Now this same Infosys has become a company with a market cap of Rs 6.60 lakh crore.
Second largest software export company
Infosys is the second largest software exporting company in the country. Murthy has given this information in an interview given to an English website. In fact, on July 24, 30 years of liberalization are being completed in the country. In this sequence, he has given this information. He said that we decided to stay in the company at that time and the result is in front.
Infosys gains due to reforms
Murthy said that everything that it is today would not have been possible without the commitment of the founders of the company at that time and the economic reforms that took place in 1991. Due to these reforms, companies like Infosys were allowed to explore the market for themselves. Earlier they had to depend on the government for various clearances. He told how the big change in 1991 had suddenly opened the way for success for Infosys.
The company was of very small size in 1991.
Murthy said that in 1991, Infosys was a very small company. The expectations, ambitions and scope of the company were also not large. The company’s office was in Jaya Nagar, Bangalore. A lot of our time was spent traveling to Delhi to get the import license to buy computers and accessories. The company’s young employees used to go abroad to work on projects and had to go to the Reserve Bank of India (RBI) in Mumbai to get foreign exchange for them.
In those days the process of importing computers was quite complicated. Banks were not aware of software and term loans and working capital loans were not given to the software industry.
No money even after 10 years of hard work
Murthy said the co-founders of the company did not have enough money to buy a house and a car even after 10 years of hard work. There was no phone in his house. He said that when the company applied for a license to import a computer, it had to go to Delhi several times with the process taking two to three years. In that era, technology in the US changed every six months and when Infosys was licensed to import computers, a new version with 50% more capacity would come out.
Rapid happiness of Indian market
Talking about the boom in the Indian stock market and the enthusiasm about Internet-connected companies at this time, Murthy said, “I wish these companies more success. Infosys was the second software company to bring a public offer. The first company was Mustek by Murthy’s friend Ashok Desai, whose public offer came in 1992. Infosys wanted to launch an IPO in 1991 but it got delayed due to Rajiv Gandhi’s assassination, Babri Masjid demolition and Harshad Mehta scam.
The stock market didn’t know
Murthy said that then the stock market was not aware of the potential for software services in the export market, especially in the US. However, Infosys had prepared well for the public offer. It starred Nandan Nilekani, V Balakrishnan and G R Naik along with Murthy in pivotal roles.
There was a delay in getting the approval of the Reserve Bank
Murthy said that there was a time when one of our officers had to go to Paris and Frankfurt for a meeting. It took 15 days to get approval from RBI. Because of this he had to stay a day longer in Paris and in Frankfurt. On this, the Reserve Bank asked for an answer that why did it stop for a day? When I was on the board of RBI 15-20 years ago, I told this to the then Governor Bimal Jalan. He laughed at this.
These leaders played a role in the reforms
He said that the liberalization that was initiated by leaders of the time like PV Narasimha Rao, P. Chidambaram, Manmohan Singh, Montek Singh Ahluwalia had benefited greatly. According to Murthy, in any country there are only two people who create prosperity or success. One corporate and the other government. In the case of India, the central government did this work in 1991.
Corporate on the other hand innovated, increased market share and made profit along with revenue. With this the corporate also paid well to the employees and rewarded the investors.
Peon also became owner of 10-15 crores
He said that there are many such peons of the company, who held shares of the company and they have become owners of Rs 10-15 crore. Even employees who could not take advantage of ESOPs (Employee Stock Option) in 1994 or 1998 were given at least 10 shares in 2008. So far, the company has given shares worth Rs 1.3 lakh crore to its non-founders. The same employees are now paying a lot of capital gains tax to the government. With this he built a house, bought a car and is teaching children abroad. Along with this, they are also contributing in social work.