Indian-American couple Bharat Desai and Neerja Sethi have sold their IT services company Syntel to French IT major Atos for $3.4 billion. The two together held 57% stake in the company, which means they receive nearly $2 billion from the deal.
Desai was born in Kenya, grew up in Mombasa and in Ahmedabad, and then did electrical engineering from IIT-Bombay.
He worked briefly in TCS before moving to the University of Michigan for an MBA. That is where he met Sethi and, in 1980, while they were still studying, the two decided to start a company (they married later) that was in some ways modelled along the lines of TCS.
Syntel, which had $923 million in revenue in fiscal 2017, was started with $2,000. Syntel earned $30,000 in its first year, and got a boost in 1982 when it signed on General Motors as a client.
Syntel failed to soar to heights of tech giants
At an entrepreneur event in 2013 in Delhi, Desai is reported to have said, I always wanted to run a business of my own. I was a horrible employee and could not live by anybody elses rule. So, the best way was to start my own company. My wife is the toughest board member.
Desai had further said that he knew the IT services industry would grow significantly and with the right moves, we could outpace overall growth. Syntel was initially an IT staffing company, but soon evolved into a firm providing IT applications services. Thats when it also started its India development centres.
In 1997, it listed on Nasdaq and in the following year, it was ranked 70th in Business Weeks Hot Growth Companies and was No. 2 in Forbes 200 Best Small Companies in America.
The companys share price tumbled in the dotcom bust, but then it steadily rose again, fluctuating in line with industry trends. There was a sharp plunge in late 2016 that took Desai and Sethi off the billionaires ranks. But since March last year, its stock has shot up, which partly explains the price now paid by Atos.
While Desai and Sethis is a phenomenal success story, Syntel couldnt quite grow the way the leading Indian IT companies did during the same period Infosys had started just a year after Syntel and today has over $10 billion in revenue, 10 times that of Syntel.
In fact, only three IT services companies Genpact, Tech Mahindra and NYSE-listed Epamhave organically hit the $1-billion revenue mark after Cognizant touched the milestone in 2006.