Indian mid-sized IT companies are growing faster than ever, with many joined the $1 billion revenue club and more than half a dozen are on the way to enter soon. Currently, 15 Indian IT firms have crossed the billion-dollar mark in annual revenue. Of this, around 10 achieved the number in just last five years.
The data was shared by Ramkumar Ramamoorthy, former Chairman and MD of Cognizant India, in a LinkedIn post to highlight the growth of mid-sized IT firms in India.
His post came after the recent exit of Debashis Chatterjee (DC) as CEO of LTIMindtree. Sharing thoughts on his legacy, Ramamoorthy noted that his leadership was not just instrumental in Mindtree’s trajectory but also inspirational for a generation of mid-sized firms that were once struggling to compete with the likes of tier 1 players.
“Until DC helmed Mindtree --- a company founded and run by some of the best professional minds from the industry --- the separation between the tier 1 and mid-sized companies was quite stark. Many companies that held out the promise to breach the $1-billion revenue mark just succumbed to being acquired by other larger players,” the partner at tech growth advisory firm Catalincs wrote.
In May this year, Chatterjee has opted to retire from the position of chairman and MD of LTIMindtree due to personal reasons.
According to Ramamoorthy, there are three factors, including senior leadership transition from tier 1 to mide-tier companies, private equity play and democratisation through digital, drove this structural change in the country.
The tech expert cited examples of Cognizant, Infosys, HCLTech, Virtusa, and Syntel, saying how senior leaders from these IT giants transitioned to mid-sized firm and nurtured these companies to unprecedented growth and scale.
"I wrote on LinkedIn that one of the best things happened to Indian IT since Y2K was senior management attrition. The trend continues even today with these leaders building all the muscles needed to gracefully scale these companies," he said.
Besides this, private equities have also played a pivotal role in the gwoth trajectory of many mid-tier companies by instilling the importance of long-term value creation, said Ramamoorthy.
Its examples include Mphasis, Hexaware, and Coforge where Baring Private Equity Asia (now EQT Group), Blackstone, and The Carlyle Group steered these companies to rapid growth by bringing in the four critical Ps—people, process, partnerships and platforms.
"Mid-tier companies have not only been able to develop cutting-edge capabilities across a canvas of digital technologies but also broaden base them in alignment with changing client needs. This has helped them offer clients a robust and competitive alternative to tier-1 companies across their chosen spectrum of offerings," he added.
