 "F C Kohli")
In 1975, Tata Consultancy Services conducted its first campus interview, at the Indian Institute of Science (IISc), Bangalore. Twelve Indian Institutes of Technology students and three IISc students became the first TCS employees to enter a formal graduate trainee programme.
Over the last 40 years TCS has not only remained the largest IT services provider in the country but also emerged as the largest recruiter. At present TCS' total headcount is 313,757. For FY16 the company plans to visit 350-400 institutes, and hire 35,000 from campuses.
Over this 40-year span TCS has created several milestones and set records, but the biggest contribution of the company has been in laying the foundation for the Indian IT services industry. Over the last 46 years, the company has had only three chief executive officers, and this stability and continuity in leadership has helped the company become a global leader.
It was F C Kohli, who took over the reins of the company in 1969, who started to get the large deals for the company. In 1974 he got in touch with Burroughs, the computer manufacturer from Detroit, USA. Kohli says that Burroughs agreed to give some work to TCS to test whether it could deliver. Burroughs wanted a healthcare software package that would be packaged with their computers. "We managed to deliver the software and after that there was no looking back. That was at the end of 1974," recalls Kohli.
TCS is among the early successful start-ups of India that went ahead and created an industry and a market for itself - a start-up because, even though it had the backing of a brand such as Tata, TCS did lay the foundation of the Indian IT services industry as we know it today.
When Kohli managed to get the project from Burroughs to provide software development services and helped them migrate their older generation of software and eventually did the same for some of Burroughs' other customers, the company was laying the foundation of the 'outsourcing' model.
TCS also experimented with the offshore-onshore model, which the $108 billion IT services industry works on, back in the 1970s. In 1978, the Institutional Group Information Corporation (IFIC) decided to move from IBM systems to TCS to make use of the time difference between Bombay (now Mumbai) and New York, suggesting that TCS engineers in India work on the software code while the US was asleep and then send the results over to New York, so it was ready first thing in the morning at New York time, Ramadorai says in the book.
If Kohli laid the foundation and explored the export market, S Ramadorai, CEO and managing director from 1996 to 2002, built on it and created a truly global company. From revenues of $125 million in 1995, TCS became a $6-billion firm when Ramadorai retired in 2008.
Despite TCS' size and footprint, players such as Bangalore-based Infosys and Wipro were able to create a bigger brand for themselves, listing first and creating better visibility in the US. By the time of TCS' initial public offering (IPO) in 2004, the company had been in business for 36 years.
Even though TCS was a tad late in tapping the market, the IPO was oversubscribed 7.7 times. On listing, the stock opened at Rs 1,198.97 per share. The company's listing for over a decade has been rewarding for its shareholders as well. A shareholder who bought 1,000 shares in 2004 had 4,000 shares (TCS announced two bonus share issues) valued at Rs 1.03 crore on January 5, 2015.
N Chandrasekaran, the current CEO and managing director, has been the one who brought in drastic changes at the company. Chandra, as he is popularly known, has in the last five years surpassed several milestones and taken the company to newer heights. For instance, TCS' revenue for FY14 was Rs 81,809 crore, representing a compound annual growth rate (CAGR) of 29.9 per cent over the last three years. Net profit grew at a CAGR of 28.3 per cent.
A better-than-expected performance also saw the company's market capitalistion grow. TCS' market capitalisation as of October 31, 2014 was Rs 510,153 crore - more than three times what it was (Rs 152,935 crore) at the end of the financial year ended March 2010. TCS is the first Indian company to have crossed a market cap of Rs 5 lakh crore.
If Ramadorai made TCS a truly global company in terms of footprint and client base, Chandra is going to the next level. He has brought in a dual focus at the company - the pursuit of both traditional business as well as upcoming technology disrupters like analytics, cloud computing, mobility, social media and digital. He has already stated that the digital business is going to be worth $4-5 billion in the next few years.
From its early days TCS has been a cash cow for Tata Sons, and this was one reason for the late IPO. In the last five years, Tata Sons' incremental investment in group companies has closely tracked its share of dividend income from TCS. The company has cumulatively invested around Rs 18,500 crore in group companies, including unlisted ones, since March 2009. During this period, it earned some Rs 16,000 crore in dividends from TCS (excluding TCS' interim dividend in the first quarter of the current financial year). For FY15, TCS announced has one of the highest-ever dividend payouts, which will make it shell out Rs 12,750 crore to its 600,000 shareholders. Tata Sons, which owns 73.7 per cent of TCS, is the biggest beneficiary of this and will earn about Rs 9,400 crore.
From humble beginnings as a unit that provided shared accountancy and registry work in data processing machines in 1968, TCS has come a long way. It was ranked among the top four most valuable IT services brands for 2014 worldwide by Brand Finance, a leading brand valuation firm - the other three being IBM, Accenture and Hewlett Packard. TCS' brand value went up from $5.2 billion in 2013 to $8.2 billion in 2014.
