Will continue to put funds for firms that fit our strategy: NIIT Tech CEO

Day after private equity firm BPEA bought 30% stake in NIIT Technologies, CEO of the firm Sudhir Singh told Neha Alawadhi the consolidation with Hexaware would not happen for at least another 2 years

A day after private equity firm Baring Private Equity Asia (BPEA) bought 30 per cent stake in Noida-based NIIT Technologies, chief executive officer (CEO) of the IT firm Sudhir Singh told Neha Alawadhi the consolidation with Hexaware, an IT portfolio company of BPEA, would not happen for at least another two years. Edited excerpts:

How do you see the developments at NIIT Technologies?

It has been an eventful weekend for us. We announced three transactions — the acquisition of WHISHWORKS, selling over 89 per cent of shares to Esri and BPEA acquiring 30 per cent stake in NIIT Tech. It is a part of a logical leadership succession plan that has been there a couple of years ago when I assumed charge. Now, it has been an ownership succession.

How are things going to change at NIIT Tech? 

As of now, we expect the existing management team will continue to work after the transaction closes and will continue to build on what we have built over the past two years. We have seen robust growth and it has been very profitable. We hope that the trajectory will continue.

How is BPEA looking to integrate NIIT Tech with its existing IT portfolio, which also includes Hexaware?

BPEA has shared their philosophy, i.e. to support the management. They have indicated that they do not want to consolidate NIIT Tech with any of their portfolio companies for at least two years.  

Will things change in terms of strategy execution?

No. There will not be any change. We have always said we only work for three industries and we will continue to do that. We will continue to operate at an intersection of those industries, with emerging technologies and try to own those spaces. The technologies are data, cloud, digital automation and integration, while the verticals are insurance, BFSI and travel.

You have worked with Infosys and Genpact. There seems to be a wave of consolidation in the IT industry. What is your view?

You have to see this in two ways. There are benefits from consolidation, which are largely to do with scale, while the other benefits are being niche, which gives you flexibility and use emerging technologies to reskill faster. The industry goes through ups and downs. The process of consolidation is going on. We have always been niche. Over the past few years, this strategy has played out very well for us. 

Will you look for more companies like WHISHWORKS?

We will continue to infuse capital and cash for companies that fit in with this strategy.

Will minority shareholders have a favourable view in case of open offer?

We envisage this deal to be beneficial for all our shareholders.

Will the founders continue to be part of the company?

At this point in time, the board will get recast once the transaction is closed and that is a call that BPEA will take in terms of what are the constituents of the newly cast board.