BackVineet Nayar retires from HCL Technologies board
Vineet Nayar's stepping aside marks the end of an era for HCL, and experts say the firm will miss his client-savvy presence in the front-end
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Bangalore: Vineet Nayar, former chief executive officer of India’s fourth largest software exporter HCL Technologies Ltd and the man widely seen as the architect of the company’s rapid rise after the 2008 financial meltdown, has retired from the company’s board to devote more time to philanthropic activities.
Nayar, who was vice-chairman, was named a senior adviser to HCL after the firm's annual shareholder meeting on Friday. He will advise the firm on key strategic issues and work with the top management to identify new growth areas, the company said in a statement. HCL did not name a replacement to take over as vice chairman.
Nayar was widely credited for turning around the fortunes of HCL Technologies, which, prior to the recession, was often criticized by investors and experts for chasing growth at the cost of margins.
He first took over as CEO of HCL in 2007, after billionaire founder Shiv Nadar passed the baton to focus more on his philanthropic foundation.
“On behalf of the board, I thank him (Vineet) for all that he has done and I look forward to his continued association with HCL as a senior advisor," said Nadar, chairman of HCL Technologies, in a statement.
During his five-year tenure as chief executive, HCL Technologies grew rapidly, even outpacing the likes of traditional sector leaders Infosys Ltd and Wipro Ltd.
After the 2008 financial crisis, HCL Technologies was one of the few companies that invested aggressively in sales and marketing, while the likes of Infosys and Wipro clamped down on spending during the period.
The investments paid off, as HCL saw a scorching pace of growth between 2009 and 2012, with annual revenue nearly doubling to over $4 billion.
Under Nayar, HCL’s margins also improved and its profit grew at a healthy clip. Between 2009 and 2012, HCL’s net profit nearly trebled to over $600 million. In 2012, Nayar sold his entire stake in the firm, giving rise to speculation of his impending exit.
Shortly after the stake sale, company insider Anant Gupta was elevated within HCL and shortly thereafter was named as the company’s third CEO in January this year.
Nayar’s stepping aside marks the end of an era for HCL, and experts said the firm will miss his client-savvy presence in the front-end. “He raised the performance of the firm and turned the sales team into a more aggressive and effective force," said Sudin Apte, founder and CEO of outsourcing advisory Offshore Insights. “His presence will be missed by HCL, that’s very clear."
“The bigger challenge, though, is to add on to its capabilities, especially in application, development and maintenance than trying to fill the vacuum left by Nayar," said Apte.
The firm made several other changes to its board, naming Keki Mistry and Roshni Nadar Malhotra, daughter of founder Nadar, as directors. Another director, Subroto Bhattacharya, also retired from the board.
Nayar will focus on spending more time at his non-government organization, Sampark Foundation, which works with government school teachers and re-trains them to improve teaching skills, and recently signed an agreement with the Punjab government to re-train teachers—its first major project.
Nayar sold his entire shareholding in HCL Technologies for about ₹ 134 crore in June 2012 and used the funds for Sampark.
“Ninety percent of my time will be for being a catalyst in bringing large-scale social change. The rest I am going to contribute to management thinking. I will continue to write and blog to motivate and inspire young people," Nayar said in a recent interview with Mint.
He also brought his management views to the fore through his book, Employees First, Customers Second.
“As I pursue my dream of creating a ‘million smiles’ through Sampark Foundation, I carry with me goodwill, best wishes and lots of learning. I also hope to continue to add value to both HCL Technologies and HCL Corp. through my continued association," Nayar said in a statement issued to BSE on Friday.
HCL Tech shares closed marginally up at ₹ 1,249.30 on BSE on Friday, a day the Sensex rose 0.56% to 21,193.58 points.
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