Arun Jain always chased big dreams. And they came true when he set up Polaris Software Labs, one of Chennai's fastest growing IT firms.
WHY DID first generation entrepreneur Arun Jain choose Chennai as his base? Take heart Chennai-ites. He found that the city had better value systems compared to other cities in the country. When he was looking for office space in 1990, he found all the dealings were above board. There was no question of making payments 60 per cent in black and 40 per cent in white. "I knew I wanted to build a value-based transparent institution and Chennai seemed the ideal place to make my dream come true," says Jain.
The dream has been translated into one of Chennai's fastest growing IT companies, Polaris Software Labs. Jain did something rather audacious recently when he merged his Rs. 294-crore company with Rs. 321-crore OrbiTech Solutions, a technology subsidiary of the Citigroup. Today, he heads a company, which has 3,800 employees with a turnover of over Rs. 600 crores.
Arun Jain, from Delhi, graduated in electrical engineering from the Delhi University in 1983 and comes from a large family of eight brothers and two sisters. His father was a Government servant. There were no luxuries to think of. However, young Arun wanted to build something on his own and has always been a man with a `lakshya' or goal.
This lakshya concept is the leitmotif, which has stayed with him and his ventures. He says he did not want to go to the U.S. as his peers did. "I was fed up with my friends who had been barely away for two years from India, complaining about everything on their return. I wanted to prove that things were possible in this country," he says.
With two other friends (one more joined later), Jain started scouting around for opportunities to work in the IT area. A small set up, Nucleus Software Workshop, came into being in 1986. This unit essentially provided backend services to Citibank global consumer banking operations.
The friends acquired a scooter, which they shared. They graduated to an old Fiat the following year. The association with Citibank and the fact that this multinational was impressed with the youngsters, led to more projects. Citibank's takeover of the Diner's Club card business presented further challenges, which were met. When Citibank decided to relocate its global consumer banking business to Chennai from Delhi, it was time for Jain to look at Chennai seriously and also think about launching his own organisation.
Polaris Software Lab was set up in 1993 with just Rs. 25,000. The partners restructured their business so that each could grow at their own pace. Jain dreamed big. He wanted a turnover of Rs. 100 crores by 2000 and wanted to establish a company, which would implement software projects for banking, financial services and insurance industries. He wanted to set up an IT technology park with global infrastructure and bring down his company's dependence on the Citigroup.
Jain has achieved his lakshya and more. By 2000, the turnover was not Rs. 100 crores but more than Rs. 200 crores. The company also acquired multiple clients with Citibank's share coming down to 30 per cent of the turnover.
In 1997, Polaris went public. In the last five years, the company has grown 40 times. OrbiTech, the company, which has merged with Polaris, contributed to 50 per cent of this growth. OrbiTech was an important customer of Polaris .The merger was a tough decision Jain had to take. "This is like moving from the comfort to discomfort zone," explains Jain.
Polaris shareholders will own about 46 per cent of the new company and OrbiTch with its 54 per cent, will be the dominant partner. Jain and his associates' holding in the new company will be 25.5 per cent as against their holding of 56.75 per cent in Polaris before the merger.
Why then the merger? On the face of it, it is a perfect fit. For OrbiTech, it provides the opportunity to reach out to customers other than the Citigroup (as a Citigroup subsidiary it could not do so). Polaris is determined to emerge as a global player and the merger makes that dream more plausible.
However, there are some in the industry who look at this deal with scepticism. Will Jain be able to hold on to the driver's seat? Has he taken on more than he can chew? And there is the question of integration of the employees of both companies into a cohesive whole. Most important, the merger may make clients look at Polaris as a Citigroup company again.
Jain is a true first generation entrepreneur. He is willing to take risks and wants to be a big time player. "All my moves have always been questioned. When I wanted to set up a large software facility in Navalur on the outskirts of Chennai, many eyebrows were raised. Today, that area has evolved as the IT belt of Chennai," he says.
For him anything is "doable". He believes in his people and his transparent systems. His people set their own game plans. "Their dreams are bigger than mine," he says. "To become a billion dollar company means a growth of six to seven times. That's not an impossible dream," he declares.
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