For long, the Indian IT (Information Technology) bellwether, Infosys, was said to have preferred organic growth and hence, it adopted a cautious approach to acquisitions.
Indeed, its legendary co-founder, NR Narayana Murthy, was mentioned as studying potential acquisitions until the time it was too late to decide whether the acquisition should go ahead. Given its avowed reluctance to inorganic growth, many investors and private equity firms held off in approaching Infosys with potential acquisitions as anyway, it was not interested, or at best, tardy towards them.
Things seemed to change with the retirement of the founders, and the consequent hiring of Vishal Sikka as the CEO or the Chief Executive Officer. Sikka went all out to change the above mentioned perception with a series of high profile acquisitions that included the Israeli startup, Panaya, and Skava. This buoyed the markets to such an extent that analysts were soon proclaiming a changed vision and a transformed approach to inorganic growth.
Within Infosys, there were murmurs of dissent, though the majority view was that it represented a New Infosys, unencumbered with the baggage of the past.
As the events transpired, Sikka left the company with a cloud hanging over the Panaya deal and for a while, uncertainty crept in with the return of Nandan Nilekani, at the helm. However, the reconstituted Board of Directors was quick to divest the firm of its Panaya acquisition and adopt a more cautious stance as far as new acquisitions were concerned.
Now, with global IT majors such as Capgemini and Accenture gaining market share in the IT space with their aggressive approach to acquisitions, there has been a debate over whether Indian firms such as Infosys, need to decide fast if they want to remain without acquisitions and base their business models on organic growth patterns.
In other words, it is time for Infosys, under its new CEO, Salil Parikh, to make its stance known on the future growth strategies in a fast changing global landscape where the outsourcing deals are dwindling which calls for a new strategy to sustain its growth momentum.