In an interview with ET Now, Phaneesh Murthy , CEO of iGATE Patni , talks about the restructure of the merged entity and their plans. Excerpts:
There were some talks of delisting Patni and reverse merging with iGATE to list on the Indian bourses as well. What is the listing plan and would you prefer just being listed on NASDAQ?
I would like to continue to see whether we can come up with the model by which we can affect this in a reasonable period of time. However, the fact is that the delisting of Patni would require north of $200 million, may be $250 million or whatever it is at current prices. It requires an order of magnitude of money in the hundreds of millions of dollars and not money that we currently have and therefore while we continue to explore multiple options to do this to try and arrive at the one stock solution, I am not entirely sure how quickly we will be able to come up with that one stock solution and I think we had anticipated that we may have to live with this problem for the next couple of years and I think that is what may actually end up happening that we live with the problem of two stocks in two different countries for a couple of years.
It is a fair point, but your current holding in Patni is at about 83%. So there are only two options available, you ramp up your stake and de-list Patni or you bring your stake down from 83% to 75%?
Yes, whatever are the current norms from a SEBI, BSE perspective etc, we will comply with that and one of the norms like you said, one of the guidelines is very clear that we have to try and bring it down to 75%. You typically get a year to plan that out and do that. So we do not anticipate that we will be running foul of any of the regulators.
The combined company has nearly about a billion dollars in terms of revenues. Is there more client traction now as a result of this, are clients showing more confidence?
I had a good meeting with a number of CIOs from both the companies a few weeks ago and it was actually a very very good meeting because we had about 20 CIOs on the table and we were just discussing and it was good to see the iGATE CIOs, the Patni's CIOs all interacting very well together. Overall, almost everybody is very supportive this transaction, understand exactly what we are trying to do. The only statement which I heard from all the clients was please stay focused on us, please stay focused on our business and some feedback that we got from some of the Patni customers just reduced the attrition a little.
iGATE is a IT company which has a strong presence in the BFSI space, the insurance and the banking vertical. Patni is an IT company which has a marginal presence in the BFSI space. So how do you plan to marry both these businesses?
Very clearly we have laid out a new vision for ourselves which is going down the path of innovation, which is going down the path of ensuring that we are changing the rules constantly and we want to deliver high impact outcomes to our clients. So the strategy is very similar to what iGATE was trying to do from that perspective, though some of the vertical-oriented strategies are very close to what Patni was doing earlier. So at the broadest vision level we are going down the path that we want to change rules, we want to impact business outcomes which was really what the iGATE world was and then at the vertical level given the IPs that the lot of the teams had created both an iGATE and Patni we are going down that micro-vertical strategy which Patni had embarked on quite nicely.
So how have the recent deal wins been like, which geography and verticals are showing the strongest traction?
We are getting some good deal wins in EMEA, that is a new region which is showing growth, but remember it is a smaller percentage of our business. We are also seeing a good set of deal wins in North America, but that is an 80% of our business anyway. So we expect to continue to see traction there.
I know you have got your handful, you have debt of about $1 billion, but are you still hungry for more acquisitions?
The need of the hour right now is to integrate and start driving value from here and based on how well we integrate and how we drive value, certainly we will decide for ourselves whether acquisition is an interesting growth strategy for us or not.
Any target for growth and revenue and profits for FY12?
Nothing specific for FY12, but I think we want to go back to the old model of iGATE of being earnings best in class growth in the industry
