In late May, senior executives from the New York Stock Exchange and NASDAQ took a trip to Bangalore, India to scout for listings prospects among the area's dozens of software startups. At the top of everybody's list: Infosys Technologies Ltd. "I'm after companies like Infosys," says NASDAQ Asia-Pacific head Patrick Sutch. "It's an American company in India."
The flap over India's nuclear tests has deferred a U.S. listing of Infosys, but most analysts agree it's just a matter of time. The reason for the interest is the company's founder and chairman, N.R. Narayana Murthy. An intense, soft-spoken man, Murthy tops almost every Indian survey as the most highly esteemed manager in the country. If India had a few thousand more chief executives like Murthy, its slowing economy would get a major boost.
That's because Murthy knows how to combine Western-style management and accounting with the skills and drive of low-cost, highly educated Indian professionals. From a $1,000 investment in a company started in Murthy's apartment in Pune, Infosys has ballooned into a $70 million company with a market capitalization of nearly $745 million. Since it went public in 1993, the company's profits and sales have been growing nearly 70% a year.
Murthy, a 52-year-old electronics engineer and son of a village-school physics teacher, originally aspired to run a hydropower station. "I loved the idea of working in a green valley with clean air," he remembers. But he became fascinated with computers while studying at the elite Indian Institute of Technology in the 1960s. Murthy got a job in Paris developing software for Charles de Gaulle Airport's traffic-control system. A leftist, he saw what prosperity capitalist Europe enjoyed. Abandoning his socialist beliefs, he returned to India in 1974 to "create wealth rather than redistribute poverty."
From its start in 1981, Infosys has relied on overseas business, giving it a global perspective that most other Indian companies lack. Among the takers for the company's low-cost, high quality customized software were sport-shoe maker Reebok International Ltd. and retailer Nordstrom Inc. Today, Infosys employs 2,600 engineers, all working on tailoring software services for such major Western corporations as Digital Equipment Corp. and Nortel.
Murthy also knows how to keep talent. To compete with Silicon Valley, Infosys became the first Indian company to issue stock options to its employees. He's convinced that India's engineers will create a great industry for the subcontinent. "At the end of the day, when the world talks about software, it must talk of India," he says. And Infosys.