Chennai (India), April 22, 2014:
Arun Jain, Executive Chairman of Polaris Financial Technology, says he enjoys being the David that takes on many a Goliath, including IBM, in the financial technology solutions business. Polaris, which recently announced the demerger of its products business into an independent entity, is looking at newer markets. In an interview with Business Line, Jain discusses his plans to set Polaris’ revenues, which has remained flat in the past few quarters, on a stronger footing this fiscal. Edited excerpts:
Do you plan to expand after one year of full- fledged operations of your financial design centre here?
We are looking for locations in New York and around London to open our centres and expect these to be operational in the next 12-18 months. On a smaller scale, we are setting up a centre in Mumbai, which will be at least 50 per cent of what we have in Chennai.
Where do you see yourself in the era of growing global competition?
Going by international standards, we are too small. If the biggest company in the financial technology business generates around $4 billion to $4.5 billion revenue every year, ours is just $400-450 million. Among Indian players, we face competition from Infosys and TCS, as they are early starters in the space. But they do not have the number of products we have. In the corporate banking and capital markets, we have a unique product line. But I enjoy fighting American and European companies, rather than Indian firms alone.
Considering the size of American and European companies, isn’t this a fight between David and Goliath?
We do find ourselves in the role of David. There is fun and pride when you fight in their battlefield and win, be it in Sweden, London or America.
So, is David giving tough competition to Goliath?
Definitely. We have invested a lot in technology here. One of the beauties of Polaris is that our people practices are good. A lot of employees have been with us for over 20 years. This is their first job. Today, in the IT world, people frequently change jobs. But you will be surprised to know that all the employees of Orbitech, which we acquired 10 years ago, are still with us. For the past 10 years, irrespective of revenue being Rs.1,000 crore or Rs.2,500 crore, we have been investing close to Rs.100 crore a year on research and development. Which other Indian company of our size does this?
Which new markets are you looking at?
I am trying to create a distribution network in 100 countries. We have hired distribution managers who are looking into how we can go to North Asia (Taiwan, Korea, Japan and China as one area), Africa, Eastern Europe and South America. Currently, we are present in 22-23 countries. The idea is to reach at least 60 countries in the next three years.
In the past few quarters, your financials have not been good. What are the reasons for this?
Our last eight quarters were flat. Growth did happen, but revenue was flat. This happens when you separate your business into two – services and products. I believe things will improve during the third quarter of the current fiscal (October-December FY15).
Do you have any growth target for your product and services business?
Our aspiration is that the product business company should grow at 25 per cent annually over a period of five years, while the service company could probably grow at 10-15 per cent annually.
Do you plan to list the newly formed product business company?
Yes, in the next six-seven months, subject to approval from SEBI. We have already filed our documents.