Physical offices won't disappear anytime soon, says Happiest Minds' Soota

The IT industry veteran said that physical offices would not become a thing of the past despite emergence of 'work from home' and gig-based working models

As Bengaluru-based IT services firm Happiest Minds gets ready for its IPO next week, the company's executive chairman Ashok Soota said that if a company is made public early, it not only brings in corporate governance, it also makes it a easier to give returns to future shareholders when growth is certain. The IT industry veteran also said that physical offices would not become a thing of the past despite emergence of ‘work from home’ and gig-based working models. Soota and the management team spoke to Sai Ishwar and Bibhu Ranjan Mishra on the company's focus areas, hiring plans and timelines put in place to hit pre-Covid-19 levels of growth. Edited excerpts:

Do you think, this is the right time to go for an IPO? Or was it planned earlier?

It was not planned earlier. We actually thought of it in the middle of the lockdown. We realised it is an uncertain market. We could see that what we would lose in growth for this year would be made up in profitability that is visible in our Q1 numbers. Secondly, markets also have a way looking to the future because they are reflecting the future. If there is any one industry which has bounced out of difficult times and global recessions, it is the IT industry. The markets began to respond to the results that were coming out and you could see that the sector which is certainly doing well is the IT sector. We took a conscious decision and what has happened since has only validated the basis for our decision.

Some believe that by remaining private, it is a lot easier to take strong decisions and execute those to drive growth? Is it not so?

I don't think public scrutiny is a concern and can slow you down. It actually brings out your corporate governance and transparency, and disclosure helps everybody and doesn't hinder the company. What people have been doing is they are deferring IPOs to raise a lot of money through very large private-equity groups so that companies get built up to multi-billion dollar valuations before going public. Now what has happened is, the scope to give rewards to your new shareholders is already sucked out. This can be seen in recent IPOs of US-based start-ups trading at significant discounts. It is far easier to give returns to your future shareholders when you know you can grow at a certain rate and keep the profitability up to those levels which we are projecting.

How has the demand and business environment changed after the coronavirus (Covid-19) pandemic?

IT and services businesses are resilient and are much more adaptable to change. As you see, technology and business disruptions are probably taking place at a much more rapid pace than earlier whether it is the advent of artificial intelligence, drones, analytics and process automation. Within that context, I think that customers continue to reimagine their businesses. They need to consolidate and optimise the post-Covid environment and additional revenue generating opportunities.

Is the offshoring model under threat because of the remote working-model or the emergence of gig workers?

If there is gig economy, we will have gig workplace. We have been working from home from the day we started the company. It is fine if it is a small team, but for a large pool of workers, you have to bring them into office. So I don't think offices are going to disappear at all and I don't think that gig workers are ever going to be a threat to us. Anybody who comes into the informal sector, is never a threat. They are bringing their own skills and it all adds to the larger market.

What are your hiring plans for the year?

This is not a high growth year so we can’t hire tons of people. However, we are hiring continuously. We are seeing a resurgence in demand in (areas like) data science, big data and cyber security. We will do it in a phased manner.

The economy has fallen the most in 40 years and the overall sentiment is very low. Can technology play a role in its rebound?

We are still one of the fastest growing markets, technology-wise. You end up adopting some of the more efficient technologies when you are a late entrant. The activity of startups has not slowed down. We are probably the top 2 or 3 in terms of being a hub for startups which is also driving technology. I'm not concerned about how the economy will pick up as it has the ability to bounce back. Let us just hope there is another stimulus package and other measures.