'Education business is like an endless loop'

Q&A with Roshni Nadar Malhotra and Shiv Nadar

First generation IT entrepreneur Shiv Nadar, founder and chairman, HCL Group, who handed over company’s reigns to professional managers, has announced an additional Rs.3,000 crore investment over the next five years towards his Foundation’s educational initiatives.

In an interview to Business Standard’s Sudipto Dey and Surabhi Agarwal, Nadar and his daughter Roshni Nadar, a trustee of the foundation and chief executive of the HCL Corp, talk about the foundation’s 20-year journey, its future activities, and Roshini’s role in the group companies. Edited Excerpts:

What has been the biggest learning from your philanthropic journey so far?

Shiv: When a business is steady and constant for a while, I get a very uneasy feeling – something is going to go wrong now. Business is meant to change. Education business is a continuous and long journey, and is like an endless loop.

Give us a sense of the expansion plans for the foundation for next five years?

Shiv: There are two pieces to it. If we get university approval in Chennai or if we don’t. If we get, this Rs 3,000 crore would not be enough. Shiv Nadar University alone will consume Rs 300 crore every year. There will be at least four more Shiv Nadar Schools. VidyaGyan will continue to be in two locations but the schools will expand.

With fees accounting for just 15% of the budget outlay, when do you expect the educational ventures – SSN Institutions, Shiv Nadar University, the schools (Shiv Nadar School and VidyaGyan) - to stand on their feet?

Shiv: A postgraduate business school normally breaks even in its revenue expenditure in sixth or seventh year. An engineering school normally breaks even in 15th or 16th year. Research will take a long time.

Roshni: On operations front, SSN Institutes hit kind of break-even point two years ago. But since then as we invested in more programmes and in research, it went into deficit. SSN is in a more mature state (among all the ventures).

Chances are that since it has been around for more than a decade it will reach the self-sustaining mark much faster. As for Shiv Nadar Schools, Shiv Nadar University, I think it will take as that much time, if not more. VidyaGyans are not meant for sustainability. We don’t charge any fee, and are purely philanthropic in nature.

The capital expenses will be borne by the foundation and the operations will get sustainable over a period of time. The reason it will take us much longer as we are transparent and clean.

You (Shiv) mentioned earlier that it could take up to two generations to build the foundation. So, are you ruling-out Roshni taking any active part in operations of the (HCL) corporation and that she will be completely dedicated to the foundation?

Shiv: Roshni is already CEO of HCL Corporation, and director at HCL Technologies. She will not have operating role. There are three layers – management layer, shareholder layer and the board layer. In the management layer she has no role to play - it is her choice. In the board layer she is already there (in HCL Technologies) and in the shareholder layer – that is HCL Corporation – she has been CEO for last five years.

You (Roshni) have said earlier that you are not interested in management role in HCL group companies. Then why did you decide to join HCL Technologies board?

Roshni: Being on the Board of a publicly-listed company is not a management or operational role. The reason I am there in HCL Technologies Board as I am CEO of HCL Corporation, the largest shareholders of HCL Technologies. As a promoter and a majority shareholder it is a governance role.

Is that kind of a signal of things to come in the future?

Roshni: I can’t be involved operationally, I have no experience. It has a professional CEO, CFO, and has been in existence for more than 35 years. I can’t be involved in an operational role as that would be an irresponsible step, it is a public company.

So, you don’t expect an Infosys-like situation ever?

Roshni: God forbid! (crosses her fingers). Infosys never had a majority shareholding. The structure was very different to begin with. I don’t know too much about Infosys. But I do hope whenever the founders decide to take a step back in HCL Technologies, it will be in a great state.