For the entire length of his career as a software CEO, B Ramalinga Raju would have received countless barbs about not quite being in the same league as his peers in the Big Three: TCS, Infosys and Wipro. At best, Raju, an MBA from the Ohio University, could claim consolation in being more successful than the other two prominent non-techie tech CEOs: Arun Jain of Polaris and Atul Nishar of Aptech. But again, he paled in comparison to the third, Azim Premji of Wipro.
But, having sold the 31.6 per cent stake held by Satyam Computer Services, a company he set up in 1987, in the decade-old Sify Ltd to Infinity Capital Ventures for $62.6 million, Raju must be laughing his way to the bank.
True, Sify was set up with an initial investment of just $5 million and that Infinity will pay $37 million for buying from Sify about 6.7 million new shares at a price of Rs 256.09 a share in cash.
However, ironically enough, this big bang deal by Raju sounds muted against the background of a much bigger deal he made some six years ago in buying IndiaWorld from entrepreneur Rajesh Jain.
IndiaWorld, which had set up a clutch of India-related websites, had a turnover of Rs 1.3 crore ($300,000) and a profit of Rs 25 lakh ($58,139). Raju paid Rs 499 crore to acquire it.
As the Nasdaq-listed Sify confessed to the Securities and Exchange Commission (SEC) of the US in 2002, "We may not be able to realise sufficient future revenue to recover our present investment in network infrastructure and online content offerings, or achieve a positive cash flow or profitability in the future. On June 30, 2002, we had an accumulated deficit of approximately Rs 10,834.0 million ($221.5 million)."
In 2002, Satyam Infoway sold its software services business to parent company Satyam Computer Services, for about Rs 34.92 crore.
The year 2000 saw the company's negative cash flow grow to Rs 59.69 crore and further to Rs 113.34 crore in 2001. It came down in the following year, but remained a sizable Rs 77.57 crore.
One frequent complaint against Raju is that he has not built a second rung of leadership. In fact, when Business Standard tried to contact him for the Newsmaker, it was told that Raju was not in town. None of his employees appeared comfortable with the idea of trying to contact the boss. One of them said any communication had to be cleared by him personally.
Barbs or no barbs, Sify CEO R Ramaraj stands unflinching in Raju's support. "Ramalinga Raju is a visionary, scholar and an exceptional leader. I would like especially to mention the freedom and support he has extended over the years to Sify, and to me personally, in how we built the company," he said.
