2005: Offshoring goes mainstream

The world got Bangalored in 2005. By 2004, there were three Indian IT services companies with billion-dollar revenues - TCS, Infosys and Wipro. Despite that, the trio was still not in the same league as IBM and Accenture. Indian IT companies had to be content with the occasional $100 million deal, while their multinational counterparts were getting the large outsourcing contracts ($500 million-$ 1 billion). That changed in September 2005, when TCS, Infosys and Patni were picked among the five vendors for a $2.2 billion mega contract by Dutch financial powerhouse ABN AMRO. Even though IBM cornered the bulk of the work, it was the first time that Indian vendors were part of an outsourcing mega deal. There was no looking back.

Indian companies began to grow rapidly in size as they cornered a larger portion of the IT contracts signed in the 1990s as they came up for renewal. Infosys, for example, more than doubled its headcount to one lakh employees between December 2005 and October 2008. Moreover, the deals kept becoming bigger. TCS signed a $1.2-billion deal with Nielsen in October 2007 - the largest deal ever for Indian IT.

{mosimage}Gung-ho on India
The first week of December 2005 saw two high profile visits, followed by billiondollar investments. Microsoft's Bill Gates, in his fourth visit to India, announced that Microsoft would invest $1.7 billion in its India Development Center and hire 3,000 employees in India. A couple of days later, Intel Chairman Craig Barrett declared $1 billion worth of investments in India, including a $250-million venture capital fund. Earlier, in October 2005, Cisco disclosed plans to invest $1.1 billion in India.

Promoters cash out
They had built their businesses from scratch and now that valuations were soaring, they sold out and cashed in. Hemendra Kothari sold a 47 per cent stake in DSP Merrill Lynch, a joint venture with his baby DSP, to Merrill Lynch for $500 million in December 2005. He sold his remaining 10 per cent stake in 2009 for about Rs 500 crore. Also, in July 2005, Rajeev Chandrasekhar sold his stake in BPL Mobile for over Rs 1,000 crore in an all-cash deal worth over $1 billion.

Did you know?
In 2005, Indian airlines booked aircraft worth $12 billion at the Paris Air Show, led by IndiGo which placed a $6-billion order for 100 A320s.

Quote of the year The question is: who will trade with me? Ketan Parekh and Harshad Mehta are names that are globally associated with scams. Ketan Parekh to BT, denying allegations that he was active in the stock markets despite a SEBI ban.