Patni Computer Systems Ltd.

Emerging on the radar

Boasting over 15,000 employees, Patni Computer Services has long been an innovator in the BPO field, even if it took some time for it to be recognized for its achievements.  Founded in the U.S. in 1972 as Data Conversion Inc., the company has long since abandoned its original name, location and business model (transferring data from paper to magnetic storage), and is now headquartered in India, from where its founders oversee its rapid expansion in the fields of IT services and business solutions.

Patni's expertise comes in a niche band of industries (a couple of which, post-2008, seem even narrower): insurance; financial services; manufacturing and life sciences; communications, media and entertainment; retail; and logistics and transportation.  What the company may lack in terms of breadth of industry coverage, however, it more than makes up for in the range of services it provides for companies in those fields, in both IT and business services.  The firm's extensive services portfolio is backed up by significant technological experience and a global delivery model that offers options such as "any-shore" capability, and dedicated centers for large clients.  All told, the firm has 21 global delivery centers spread around the world, in addition to 23 sales offices.

A family affair no more

Patni Computer Systems got its name from the three Patni brothers who founded the firm and by 1978 had moved it to Pune, India, where they had opened their first operations center and begun developing software for clients, an early example of tech outsourcing that confirms the company as one of the trailblazers in the field.

From its founding until early in 2009, the firm had always been run by CEO Narendra K.Patni.  As might be expected when one has run a company for over three decades, the exit process was not entirely smooth, stretching back at least as far as October 2007.  That month, CEO Patni's two brothers, Ashok and Gajendra, both stepped down from their executive positions at the firm, sparking interest from several private equity firms in their combined 29 percent holding in Patni, plus a further 16 percent owned by private equity firm General Atlantic.  Reports in the Indian media at the time suggest that problems arose over the issue of management control, with investors unwilling to purchase a majority share in the company without guarantees over their rights to effect management change if so desired, a situation complicated by Narendra Patni's continued tenure as CEO.  Indian media coverage also suggested that the incident caused something of a rift between the brothers,  as Ashok and Gajendra's plans to sell their stake in the firm then came to depend on  Narendra's willingness to cede control of the firm.

As of December 2008, however, all of the uncertainty seemed to have been resolved with a single stroke; that month, Narendra Patni agreed to step down from his perch, naming Jeya Kumar as his replacement, effective February 2009, although Narendra will stay on as chairman.  Kumar most recently served as CEO of MphasiS, and has more than 25 years of experience in the tech industry, having also served as senior vice president of Sun Microsystems and a member of Sun's Executive Management Group.  In relation to the rumored rift within the Patni family over the issue of a stock sale, Narendra Patni told India's Business Standard at the time of Kumar's appointment that "shareholders will always have the right to sell their shares.  But the current economic conditions have brought the shareholder to focus on the growth of the company."  Loosely translated, this sounds an awful lot like saying the shares are worth significantly less in the aftermath of the economic meltdown of 2008 than they were when the ordeal began in October 2007.  Meanwhile, the company's ties to the Patni family don't seem likely to end anytime soon: in addition to Narendra staying on as chairman,  his son, Anirudh-- a former McKinsey employee-- serves as the firm's senior VP and head of strategy and corporate development.



Patni Computer Systems Ltd.


Akruti, MIDC Cross Road No 21
Andheri (E)
Mumbai 400-093
Phone: +91 22 6693 0500
Fax: +91 22 6693 0211
www.patni.com

STATS


  • Employer Type: Public
  • Stock Symbol: PTI - PATNI - PATNI COMPUT
  • Stock Exchange: BSE, NSE, NYSE
  • CEO: Jeya Kumar
  • 2008 Employees: 14,894

Key Financials

  • 2008 Revenue: $719 million

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