L&T Infotech will hit the capital markets on Monday to raise up to ₹1,243 crore through an initial share sale offer. L&T group’s Chairman AM Naik, who started the company post the dotcom burst in 2000, believes the IPO will give L&T Infotech the kind of boost it requires to become a $2-billion company in the next three-four years. In an interaction with BusinessLine, Naik spoke about the company’s plans. Excerpts:

Why did you decide to come up with an IPO now?

All companies do an IPO in their life at some stage or the other. TCS did it after 31 years, we are doing it after 15 years. And that is when you feel that you have to put your foot on the accelerator to transform fast and grow fast.

The IPO will also create more accountability, more autonomy, more decentralisation for management of L&T Infotech to perform.

So are you looking at doubling your revenue in the next three years? What would be the areas of focus?

We want to double in three years. We will grow from $900 million to $1.5 billion, organically. Another $400-500 million will come from acquisitions. 

Are you already in talks with companies for acquisition?

We are currently busy with the IPO — that is the top priority. We need to make it a success, then restructure the business, get the management moving, let them learn to face the world.

And from April next year is when we will start acquisitions. 

How are you trying to make the company nimble?

The fact that we are taking the company for an IPO, forces them to perform against the best company in town. 

We have new CEO, we have taken new COO. We have taken a number of new people in marketing, sales, technology and new age digital.

We are building up the team very fast. 

Europe has been weak for L&T Infotech. So we are strengthening Europe. Revenue of L&T Infotech is 68 per cent from US — it is too much US-centric.

We want to bring it down to 60 per cent in the next 3-4 months.

In Europe, we are 17.5 per cent, we want to take it to 25 per cent. Rest of the world will continue to remain at 15 per cent. 

In less than two years, we want to bring up PAT from 15 per cent to 16 per cent.

And at the end of five years, it should stabilise at 17 per cent.

What are you doing in the high growth areas such as digital, automation and platforms?

We just started one year ago and we have come to 18 per cent (digital, automation and platforms) of our sales from new age technologies.

We think within a year, we’ll go to 35 per cent. 

It is an opportunity to catch up when everybody is trying to learn new age technologies. If we move fast, I think we will be as good as any other.

We maybe one or two years late (in new age technologies) but there is a possibility to catch up. 

How do you see the evolution of the IT industry?

The entire IT industry is set for a change. The manpower intensity will come down with more and more automation. The days where one big company was taking 25,000 people every year may come down to 10,000 a year. 

If L&T Infotech was earlier adding 3,000 every year, we will possibly come down to 2,000 every year.

So, from manpower intensity it will become automation intensity — that is the change the industry will face. 

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