 "Selling Polaris is big decision of my life: Arun Jain")
Polaris-Virtusa have signed a Share Purchase Agreement (SPA) by which Virtusa's subsidiaries that will acquire 53 per cent from promoters, including Arun Jain and others, for Rs 1,173 crore and further intend to increase it to 75 per cent. Jain, who founded the company 22 years ago, said initially it was a tough call but taking company's future into consideration, he decided to sell it to Virtusa. Jain tells T E Narasimhan and Gireesh Babu that he will now have more time to focus on Intellect Design Arena and his interest in health care.Edited excerpts.
Why have you decided to exit from Polaris?
This is part of the strategic plan in 2012 when we decided to have two different businesses – products and services. Products need investments and time. We have made the investment and now we need to spend time. The first driver is how much time I have to spend in Intellect Design. Second, services businesses requires size in the global marketplace. About 48 per cent concentration on a single client (Citigroup Technology) can be a risky. About $300 million is not a size for the service business, we are competing with TCS, which is a $8 billion in size.
We don't want to sell it or want to transfer the baton to somebody where it will get lost. We wanted to find some partner who has a similar kind of specialisation and we found Virtusa. We (Polaris and Intellect) can bid together for large deals. The employees will get a bigger canvas to work on. From the customer perspective, they will get a bigger platform to work on. Why should I bring in my emotion at a time when employees and customers are going to get benefited? When you work as a leader, you need to know how to let go. Letting go is equally a big trait to a good leader. Sometimes we get attached to what we create. Here, I looked at what is right for the people and right for the customer. So the question is whether Arun Jain is important or Polaris important.
What next for Arun Jain?
I am passionate about intellectual property (IP). We need to create an ecosystem of investment in IP. People even in large IT companies are not believers of IT. Apple has a revenue of $230 billion, which is higher than the GDP (gross domestic product) of Bangladesh. People has to recognise that the whole growth of America is coming from the agriculture and it is coming from IP.
Where do you want to see Intellect?
Currently, the company's turnover is around Rs 800 crore and in three years I want to double it. We will be a global leader in financial technology. We have the largest product portfolio in the world.
You said you wanted to do something in health and education?
The health care system in India is the worst. We will create an initial corpus of Rs 100 crore for health care. Over the next 10 years, we want to set up 10 hospitals with 50-100 beds each. It will be run by a trust. The capital cost will be borne by the trust and the services could be offered at very low cost.
In education, I am thinking more on the area of research. It is still an idea and I am keeping the fund aside for education.
Will you be an active angel investor as you have more money in your pocket now?
We have a start-up called Nukkad, which is working with CII (Confederation of Indian Industries). Start-up Nukkad is a 12-part, year-long programme where 50 start-up entreprenuers will meet to discuss and resolve obstacles to business growth. We need a six-month programme for start-ups. I will be a mentor and an active angel investor.
Why have you decided to exit from Polaris?
This is part of the strategic plan in 2012 when we decided to have two different businesses – products and services. Products need investments and time. We have made the investment and now we need to spend time. The first driver is how much time I have to spend in Intellect Design. Second, services businesses requires size in the global marketplace. About 48 per cent concentration on a single client (Citigroup Technology) can be a risky. About $300 million is not a size for the service business, we are competing with TCS, which is a $8 billion in size.
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Why did you decided to go with Virtusa?
We don't want to sell it or want to transfer the baton to somebody where it will get lost. We wanted to find some partner who has a similar kind of specialisation and we found Virtusa. We (Polaris and Intellect) can bid together for large deals. The employees will get a bigger canvas to work on. From the customer perspective, they will get a bigger platform to work on. Why should I bring in my emotion at a time when employees and customers are going to get benefited? When you work as a leader, you need to know how to let go. Letting go is equally a big trait to a good leader. Sometimes we get attached to what we create. Here, I looked at what is right for the people and right for the customer. So the question is whether Arun Jain is important or Polaris important.
What next for Arun Jain?
I am passionate about intellectual property (IP). We need to create an ecosystem of investment in IP. People even in large IT companies are not believers of IT. Apple has a revenue of $230 billion, which is higher than the GDP (gross domestic product) of Bangladesh. People has to recognise that the whole growth of America is coming from the agriculture and it is coming from IP.
Where do you want to see Intellect?
Currently, the company's turnover is around Rs 800 crore and in three years I want to double it. We will be a global leader in financial technology. We have the largest product portfolio in the world.
You said you wanted to do something in health and education?
The health care system in India is the worst. We will create an initial corpus of Rs 100 crore for health care. Over the next 10 years, we want to set up 10 hospitals with 50-100 beds each. It will be run by a trust. The capital cost will be borne by the trust and the services could be offered at very low cost.
In education, I am thinking more on the area of research. It is still an idea and I am keeping the fund aside for education.
Will you be an active angel investor as you have more money in your pocket now?
We have a start-up called Nukkad, which is working with CII (Confederation of Indian Industries). Start-up Nukkad is a 12-part, year-long programme where 50 start-up entreprenuers will meet to discuss and resolve obstacles to business growth. We need a six-month programme for start-ups. I will be a mentor and an active angel investor.