From Ajanta caves to financial waves

Updated on May 17, 2007 06:21 PM IST
In IT, where everything works to detailed plans, aggressive sales pitches and too-clever-by-half strategies, Vishnu Dusad admits to fumbling and gliding his way through, reports Narayanan Madhavan.
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Hindustan Times | ByNarayanan Madhavan

Vishnu Dusad believes in the power of pleasant coincidences.

In the frenetic world of information technology, where everything works to detailed plans, aggressive sales pitches and too-clever-by-half strategies, the 49-year-old admits to fumbling and gliding his way through. He has been one of the best kept secrets of India's software success story.

Maybe, the soft style does have its virtues in an industry where dedicated services and references matter a lot. From being a fresh IIT graduate happy to write computer code for piecemeal projects with a group of friends, Dusad has gone on to build one of India's rare product companies amidst a welter of service companies.

Growth at Nuclear Software Exports Ltd has been meteoric since 2001, when it finally became a real world-class product company six years after it went public with the idea of becoming one. In the chequered period that intervened, hit by an industry slowdown, its shares issued at Rs 50 became a penny stock at nine rupees.

But the bounceback has been strong and sound. There have been three bonus share issues since 2001, including a one-for-one announced last month.

Last year, its flagship product FinnOne, was named by industry tracker IBS Publishing as the world's No1 best selling software in lending operations.

FinnOne helps banks in disbursements, payments, collections and all accounting associated with it, and added to itself a vital loan approval module in 2002. Though the product had its origins in the projects Nucleus's founders did in the 1980s, over a period of time, it has acquired a solid brand value. It has 150 customers in 22 countries and some 80 of the customers are overseas.

The company's share now trades at around Rs 1,050, with a market capitalization of Rs 1,700 crore. The company's turnover is at Rs 221 crore, about 54 per cent of it coming from products.

Unplanned growth

Growth was not exactly planned at Nucleus for a decade of its existence.

Dusad recalls his beginnings as a somewhat nervous, Marathi-medium student landing up at Delhi's Indian Institute of Technology (IIT) from Aurangabad, not far from the Ajanta Caves. Perhaps because of his upbringing in a family that ran a shop and a trucking business, Dusad decided to plunge straight into entrepreneurship.

"I did manage to get an appointment letter from Telco (now Tata Motors) but never got an opportunity to join them," Dusad jokes.

Dusad and two other young engineers, Yogesh Andlay and Arun Jain, started a modest software writing shop called International Info Systems in 1983 and after an initial round of coding jobs, found a doorway for big things in Jaithirth "Jerry" Rao, who was then heading Citibank in India.

Rao is now an IT bigwig in his own right, having grown and sold MphasiS BFL to global major Electronic Data Systems, while Jain, thanks to the same Citibank connection, went on to build the successful Polaris Software Lab.

From solutions to products

The seeds of a product company had been sown in the early days, when more modest players were content to come up with "solutions" an industry jargon for customised software done to help a customer, but stopping short of rigorously designing a comprehensive, reusable, packaged solutions suite that gives the bundle of code and design a "product" status.

However, the references sprouting within Citibank's global system, and word-of-mouth connections with the bank's formidable alumni network in the other parts of the financial sector slowly won Nucleus a reputation that got them closer to founding an independent service company, which they started in 1986. Customer demand slowly fanned a product dream.

The company went public with its product story in 1995, but had no product revenue even in 1997.

But more pleasant coincidences were beginning to happen. Nucleus stumbled on a request for proposal (RFP) in 1996 from Mongolia's central bank that year and ended up beating giant Oracle to win a $200,000 contract. That gave the company the elbow room to think big in the risky business of products, which involve long gestation periods, deep research and meticulous design.

Dusad modestly talks of how benefactors did the selling for his work, when all he did was to land up and sign the deal in the cold climes of Ulan Bator.

"It was a huge morale booster," he recalls.

A similar deal with the State Bank of Mauritius to manage a loan module followed.

And it was only then Nucleus decided to hire its first regular marketing manager, Niraj Vedwa.

"Till then we were all techies. Niraj brought in the sales orientation," Dusad says. "We had never understood the ABC of sales."

References also brought in a strong service deal in 2000 with Japan's Shinsei Bank, which also became an investor. This gave the bank enough cash (what Dusad calls the "steady state") to spend on research and development on the product side.

Nucleus now has another product called Cash@ Will that enables banks to take over collection and payment functions from corporate customers, and some other products in segments such as fraud management, trade finance, mobile banking and credit card management.

"We are extremely bullish, and that's why the bonus issue," says Dusad.

The company, whose customers include GE Capital, American Express and Bank of America, has development centres in Pune and Chennai in addition to its main campus at Noida. As many as 1,100 of its 1,500 employees work on the product side.

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