Ex-Vice Chairman of Tech Mahindra Vineet Nayyar dies at the age of 85

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The 85-year-old former vice-chairman of Tech Mahindra, Vineet Nayyar, passed suddenly. Nayyar had a variety of positions over his career, from district magistrate to managing the turnaround of an Indian IT behemoth dogged by scandals.

Prior to founding the state-owned Gas Authority of India, Nayyar began his career as a district magistrate. Eventually, he rose to the position of director of the World Bank’s infrastructure and energy divisions. Nayyar entered the IT services industry when Shiv Nadar, the founder and chairman of HCL Technologies Ltd., noticed his skill as a manager at the time. First as managing director of HCL Corp., Nadar gave him a position at HCL. Later, he was made vice-chairman of HCL Technologies and founder and CEO of HCL Perot Systems.

IT expedition

As the company’s founder and managing director, Nayyar began his career in information technology in 1996 with HCL Perot Systems, a 50/50 joint venture between HCL Technologies and Perot Systems. There, he experienced a turbulent period as he became entangled in a fierce boardroom struggle between HCL and Perot Systems for control of the business, with the latter even attempting to remove him from his position as chief executive due to disagreements about how the company operated.

But he also managed the company’s 1999 IPO, which took place three years later, and continued to lead it until 2005, when HCL sold Perot its share for ₹480 crore, reportedly the largest IT deal in Indian history at the time.

Nayyar was no stranger to difficulties. As a government officer, he oversaw the construction of India’s largest gas pipeline, which connected Hazira in Gujarat to Jagdishpur in Uttar Pradesh, at the age of 22, which presented another difficult task.

Each circumstance has unique qualities. In a July 2009 interview with Mint, Nayyar discussed his issue-solving methods. “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.”

In January 2005, the former World Bank executive became a vice chair, chief executive officer (CEO), and managing director (MD) of Tech Mahindra, which was then known as Mahindra British Telecom (MBT).

Income doubles

Two months after he joined MBT, in March 2005, the company reported $217 million in revenue for the fiscal year that ended. By the time the company’s fiscal year concluded in March 2007, it had changed its name to Tech Mahindra, and its revenue had more than doubled to $649.9 million annually. In August 2006, Nayyar became the company’s first public shareholder.

At that point, Nayyar was poised for what could have been his greatest moment in life: bringing back a business damaged by one of the largest financial scams in Indian history.

Tech Mahindra paid $582 million to acquire Hyderabad-based Satyam Computer Services, which at the time was the fifth-largest IT company in the country, in the fiscal year that ended in March 2009. This was after company chairman B. Ramalinga Raju was arrested and the company’s leadership was transferred due to a ₹7,136 crore accounting fraud.

It is important to note that Tech Mahindra and Mahindra Satyam operated as separate businesses during this period until the former, having announced the acquisition of the latter in 2009, finalized the deal in June 2013.

Nayyar, the chairman of the Mahindra Satyam board, and CP Gurnani, the president of Tech Mahindra at the time Nayyar joined the business and currently the CEO and full-time director of Mahindra Satyam, were now in charge of rebuilding Satyam.

During Satyam’s rebirth, Nayyar stated in a 2009 interview with Mint that his first priority was to reduce the company’s non-core expenses, which at the time accounted for 26-28% of total expenses.

Satyam had account losses and never achieved operating margins above 3%. Nayyar and his close aide Gurnani realized that the company needed to be revived prior to the transaction being finalized. Anand Mahindra, the chairman of Tech Mahindra’s parent company Mahindra & Mahindra, asserted that Satyam provided his business scale, size, and an export focus because the majority of Tech Mahindra’s clients were domestic. The agreement was viewed by Nayyar as a “match made in heaven.”

Streamlining processes

Reducing the operational layers, firing employees Raju had overhired to demonstrate the company’s growth, and focusing more on sales, which included frequent client meetings, were some of the steps taken to rebuild the business.

When the transaction was revealed, Satyam brought in $985 million in revenue. Four years later, the company reported ₹76.9 billion in revenue, up 20.3% from the same period the previous year, in the financial year that ended in March 2013, the year the transaction was finalized. During that period, Tech Mahindra declared an annual revenue of ₹67.9 billion.

TechM became one of the top ten Indian IT services companies because to Vineet Nayyar. He controlled the expansion of the Indian IT services sector when he was in charge. According to Shriram Subramanian, the founder of InGovern Research Services, “he is one of the leaders who was prominent during a period when Indian IT services went through a ‘hockey-stick curve’ between the late 90s and 2000s.”

“Bold is beautiful” refers to the ability to make difficult decisions with clarity and grace. “The acquisition of Satyam is the biggest example. And then, there are the multiple joint ventures. I learned that fearless, right decision-making not only helped set good precedent but gave an extra shot of confidence to every member of the team,” wrote former Tech Mahindra CEO CP Gurnani in his list of “powerful leadership lessons” he picked up from Nayyar.