Infy's appointment of new M&A head reflects thrust on inorganic growth

IT major Infosys' decision to appoint Ritika Suri as its head of mergers & acquisitions reflects the new found aggression of the Bangalore-based company in the M&A landscape.

Suri, who had joined Infosys couple of months ago from German software maker SAP where she was a senior VP, is based out of the US and brings to the table her knowledge about client geographies where most of the acquisition targets are located, according to senior official sources.

During the company’s annual analysts meet held in Pune earlier this month, Vishal Sikka, the CEO & MD of the Bangalore-based IT services company had said the company is going to pursue an 'active inorganic strategy’.

Some of the areas he had highlighted where the company would like to pursue inorganic growth opportunities include automation, artificial intelligence, analytics and Internet of Things (IoT) and collaboration technologies.

According to a senior Infosys official, Suri’s appointment as the head of M&A was primarily triggered as previous M&A head Deepak Padaki was appointed head of strategy and corporate planning.

The role of strategy and corporate planning head had been lying vacant after V Ganapathy Subramanian, who was heading it, left the company some 5-6 months ago. He subsequently joined Axilor Ventures, a start-up incubator launched by Infosys co-founders S D Shibulal and Kris Gopalkrishnan among others.

“Now that Vishal (Sikka) has laid out the new strategy which needs effective execution, we looked at some internal candidates and Padaki was found suitable. For the role of M&A head, the company was primarily looking at somebody who is based out of the Valley and has got good exposure to global corporates and Suri was found suitable for that role,” senior sources at Infosys said.

Infosys, which has been sitting on huge cash reserves, has often been criticized for not pursuing an active M&A strategy. After Sikka assumed the charge of CEO & MD in August this year, he has been quite vocal in filling the technological gap by acquiring companies which can bring newer technological capabilities.

“While our core focus on organic growth strategy continues, we believe that it is necessary to complement this with an active inorganic strategy as well. We are interested in doing acquisition of small innovative companies,” Sikka said at the analysts meet. “We are not interested in acquiring technologies from yesterday, but in acquiring technologies of tomorrow.”

As on September 30, 2014, the company had a total cash and cash equivalents of Rs 33,616 crore.

Apart from M&A initiatives, Suri would also be responsible for forging deeper ties with the start-up ecosystem for which Infosys has already set aside $100 million. The company is also looking at investing in some of the start-up companies apart from handholding them for better market access.