A LARGE PICTURE window in TV Mohandas Pai’s office on Millers Road in Bangalore frames a canopy of trees. Plush brown sofas, a television flashing stock market news, framed memorabilia and Pai’s imposing frame sheathed in trademark rumpled kurta populate the space that one could easily mistake for just another office. This, however, is a modern approximation of the French salon through which many statesmen, thought leaders and plutocrats have walked, no doubt bracing for Pai’s brand of political incorrectitude. It has been a rallying point for some of India’s best startup ideas—business plans that withstood Pai’s savage criticism and were rewarded with the financial and strategic wherewithal to make it big. Great currents of thought have flowed through this open door of possibility. This is arguably the promised land for every aspirant for fame in Bengaluru. For here you could chance upon one of the world’s leading philanthropists taking notes on amending a less-than-ideal ratio of yearly spend to the corpus of his foundation, a ruling party politician who finds himself drawn into a disquisition on civic awareness, or ruffled young men learning to plug the holes in their business pitch. Pai is the connective tissue between them all. And he seems to enjoy a panoptic view of society. “He can speak at length on the atomic bomb, or about phonetics,” says U Ramadas Kamath, executive vice-president and head, facilities, administration, security and sustainability at Infosys, of his former boss-turned-close friend. “He is a rare individual who dreams big but also has an eye for the smallest detail,” Kamath says.
The finance maven who, as CFO, helped brand Infosys among global investors, set standards in transparency and corporate governance and architected India’s first employee stock option plan, has, since leaving the IT bellwether in 2011, turned his energies to another, vaguely contiguous world. In just a few years’ time, he has emerged as one of India’s top startup evangelists and angel investors by knitting together people with operational experience, a deep understanding of markets and business strategy and the ability to access capital. The prime mover in a dozen funds, currently funded with $325 million with a total target of $650 million, Pai, 58, has a stake in over 130 startups across asset classes like deep tech, education, real estate and public markets. He has personally helped build many into sturdy businesses and the results are beginning to show. Earlier this year, Aarin Capital, the first fund founded by Pai with Manipal Education and Medical Group’s CEO and MD, Dr Ranjan Pai, made a lucrative exit from education technology startup Byju’s. As early stage investors, they had put up about $9.2 million in late-2012 and netted four-fold returns after Byju’s raised $75 million from venture capital firm Sequoia Capital and Belgian investment firm Sofina this March. Byju’s claims to have 120,000 subscribers paying on average Rs 11,000 per year to access its digital classrooms. Not long ago, when founder Byju Raveendran was struggling to acquire customers, it was Pai’s number crunching that helped him pivot. An information junkie, he compared data from the last two Censuses and recommended that instead of targeting Class X-XII students who were about to start attempting competitive exams, he should start adding value early on, from Class VII. Raveendran heeded his advice, built a solid parent-facing app to help track students’ progress, and cracked the notoriously difficult education tech market.
Pai knows exactly what he brings to the table. He is proud of his long stint at Infosys, overlapping with the Indian infotech zeitgeist. “Tell me how many people have helped scale a company from $5 million to $6.5 billion over 20 years, who have won the best Indian CFO award for several years, ran businesses globally, met 300 investors a year, helped hire 160,000 people and train 225,000 as HR head, and supported a product business like Finacle?” he says in his breathless style. “I realised that there are very few people like me. This is something Ranjan Pai and I have in common. He turned a $200,000 business into a $1.6 billion empire. So we know a thing or two about scaling up,” says Mohandas Pai, who is Chairman, Manipal Global Education.
Pai was an early believer in the potential of startups that were setting out to run India efficiently. He also thinks they will create nearly three million jobs in the next decade. “What I fear is that Indian capital is only 5 per cent of the total capital coming into venture. In China, it is 65 per cent. I worry that in the next 5-10 years, India will become a battlefield for Chinese and Western capital. There is not enough Indian ownership because our Indian capitalistic class is not investing in this high-growth area,” he says. “About 20,000 startups have created 350,000 jobs so far. In 10 years, there will be 100,000 of them, generating 3.2 million jobs. By 2025, IT services and startups between them could have 10 million well-paying jobs. There is no other industry that can employ educated middle-class Indians in such numbers.”
Tell me how many people have helped scale a company from $5 million to $6.5 billion over 20 years, and helped hire 160,000 people? I realised there are very few people like me
Shortly after V Balakrishnan, who had succeeded him as Infosys CFO, left the company, he came to meet Pai and the two set up Exfinity Venture Partners, a Rs 125 crore early-stage fund investing in B2B startups. “In India, all the funds were managed by finance guys, not by practitioners. We said we would put in 25-30 per cent of the money and found that even bankers were willing to raise funds for us, purely out of trust,” says Balakrishnan. At Infosys, they worked together on landmark annual reports, hammered out ADR guidelines, redeemed the finance department and brought it to the forefront of the company. On their first trip to New York in the late-1990s, they walked the city on foot. Two decades later, they walk the corridors of power and policy making, and argue just as much. “Mohan and I have a good-cop, bad-cop thing going when we meet startups,” Balakrishnan jokes. None of Exfinity’s investments is made on a whim. The fund, which is now raising money for a second innings and is in talks to set up an offshore entity, met over 500 startups before investing in nine, long-term technology bets including Riversilica, a solutions provider for IP streaming video delivery; Uniken, a digital connectivity and access platform; and Mad Street Den, a computer vision and artificial intelligence company.
Ask Pai about an e-commerce bubble and he comes at you with guns blazing. “People like you don’t know the markets,” he jibes. “I was in the Nasdaq market when Infosys’ valuation went up from $19.50 billion in January 2000 to $46.7 billion in March and came back to $21.70 billion by the end of April. That is a bubble, not what’s happening with startups in India.” At first, I find him impatient with the very texture and pace of language. He prefers the clarity of numbers and has a combination of wit and vigour that the French call esprit. “Record this. I speak fast,” he warns. I am tempted to revise my provisional assessment of him as the conversation inevitably veers to politics. “I have seen the rise of a great country that reformed itself. I have seen the rise of a great industry and played a big part in it. So it saddens me when people try to belittle Indians, peddle wrong data and say we are intolerant. India is a complex country with many problems, but per million population, we are no worse off than any large country,” he says. Pai has strong views on the role of the Congress and the Left—“for whom the real India is all bad”—in the articulation of Indian history, and he frequently airs them on TV, social media and public fora with no thought to consequence. “I’d rather talk to Arnab Goswami, who offends everyone and has no agenda, no sacred cow, rather than to devious journalists who want to impose their views on others,” he says. “People can fight me anywhere, I have got the data and I am happy to be proved wrong on the basis of facts.”
“He is an information sinkhole,” says his older son Pranav, 27, who, along with his brother Siddharth, 23, manages the family office, 3one4 Capital, which has about 40 startup investments. “He makes sure you know he knows what he is talking about and this comes across as aggressive to some people. It is just that he can overwhelm you with logic and data,” says Pranav. Pai’s sons—Pranav has an engineering degree from Stanford and Siddharth is a chartered accountant—regularly meet startups and troubleshoot, freeing up much of Pai’s time for more important interventions in business strategy, public engagements and regulatory consultations with the government. He also spends his time reading and advocating good governance—he started the Bangalore Political Action Committee with Biocon Chairperson and MD Kiran Mazumdar Shaw in 2013 to help groom a generation of responsible local leaders—and philanthropy, besides engaging in Twitter duels.
Despite being on the Infosys Board, sometimes I felt like an outsider. The founders met among themselves often and I never became part of this private club
Pai is an oddity in the world of business: an abrasive and opinionated man who has managed to network with the who’s who of tech, a sour critic who is also a big dreamer, a capitalist who admittedly wants to “make loads of money” and give much of it away. “It is just as hard to convince him to invest in your business as it is easy to get him to donate for a cause. He is a terrible taskmaster,” says Anil Shetty, one of Pai’s young protégés and the man behind Peace Auto, an initiative to give Bengaluru autos a makeover. “He is my worst critic and my biggest strength.” When Shetty became a public face, Pai chided him for his self-importance and told him to stop ‘giving gyan’. A viable credo in life, he told him, is to want little for yourself, so you have the time to dream big for the world. “He has an old Toyota Corolla he refuses to replace. Should you ride with him and make the mistake of suggesting that he turn on the air-conditioning, he will tell you to breathe in the fumes and the dust and that it will make you stronger,” adds Shetty.
THE CONSENSUS SEEMS to be that Pai is an insufferable boss and a helpful human being. “He is very approachable,” says Vivek Gupta, co-founder of Licious, a year-old online meat shopping platform that Pai was among the first to invest in. Licious claims to deliver over 10,000 orders a month and raised $3 million in series-A funding this April. But when Gupta and his partner Abhay Hanjura first pitched their idea to Mohandas Pai, he sent them packing. “He bombarded us with questions and told us we needed to put in a lot more work,” Gupta says. Pai then helped position Licious as a premium brand trying to solve the problem of buying fresh meat. “He insisted that we focus on Bengaluru, which has the highest per capita income of any city, rather than spread ourselves thin. ‘You are trying to disrupt the ecosystem, saste mein nahin bechna (don’t sell cheap),’ he told us. The second meeting ten days later was very different. He was finally listening to us,” says Gupta. Licious is today one of Pai’s blue-eyed companies. “We have a simple rule of thumb. Anything we want, we write to him, whether it is about leasing land or meeting the media. He connects us with the right people,” Gupta says. Indeed, Pai has emerged as liaison extraordinaire for Bengaluru’s startups, taking up their cause with Delhi and working with governments to expedite processes and get clarity on regulations. “The man is a supercomputer,” says Karnataka Industries Minister RV Deshpande. “He is consulted on various policy matters around infrastructure and industry because he is not only knowledgeable, he is also selfless and willing to help,” he says. In 1997, as state industries minister, Deshpande ushered in India’s first infotech policy, drafted primarily by Pai and his peers. “At the time I knew little about IT. I just signed the draft. Pai is a visionary. Although he may bruise political egos with his truthful manner, I think it is something we all overlook because of his sheer brilliance,” says Deshpande.
Pai is a visionary. Although he may bruise political egos with his truthful manner, I think it is something we all overlook because of his sheer brilliance
And there it is, the paradox of being Mohandas Pai. Pai the merciless socio-economic observer is respected and reviled equally, but then, so was Pai the corporate reformer. Let us rewind to 1993, when a young finance professional in Bengaluru was about to quit his job at Prakash Leasing, where he had worked for over seven years, earning little. Pai had a degree in commerce and another in law; he was a rank-holding chartered accountant and even ran a practice briefly. At this critical juncture, when he nearly moved abroad to earn a better livelihood, for he had to support his wife and two sons, Infosys was planning an initial public offer. Those were times when Pai crunched company balance sheets for breakfast. (According to a friend, he had collected about 4,000.) With his characteristic curiosity, he went to the Infosys pre-IPO investor meet and then to a meeting of analysts in Mumbai, where he posed some deep, searching questions. “Vallabh Bhansali (the Dalal Street veteran who managed the IPO) was on stage and he advised Narayana Murthy not to answer one of my questions,” Pai remembers. Murthy and Infosys co-founder Nandan Nilekani decided to get Pai on their side. Starting 1995, Infosys became a 14-hour daily obsession with Pai and Murthy’s extraordinary leadership inspired him to work hard. Soon, he was handling infrastructure, laying the groundwork for what would become the best campuses in the country. He won acclaim as CFO, enabled the first listing of an India-registered company on Nasdaq, and went on to chair HR, where he brought in a nine-hour clocking policy to improve efficiency, much to the consternation of managers who were, in his words, “goofing off”. “Mohan had unlimited curiosity, never hesitated to question anything, and was willing to take bottomline responsibility for any tasks. These are qualities of an extraordinary leader. He has added enormous value to the company in various roles in finance, HR, education, administration and creation of physical infrastructure. We will always be grateful to him for his contribution,” says Infosys Chairman Emeritus NR Narayana Murthy.
Some in Infosys, however, saw him as a career arriviste, and were none too happy with his outspokenness and occasional gaucherie, or the way he could hold his own with Murthy, the then CEO. “There was a sense among certain sections that he was overstepping,” says a source who worked at Infosys for over a decade. “People begrudged him for being Murthy’s favourite, but neither seemed to care.”
Pai, however, admits to feeling like an outsider. “Infosys was my dream company and I achieved here all that I had set out to achieve: to set industry standards, to help create a company which would be an exemplar for others, to contribute to the country’s growth and development and to excel in top management roles.” But there was something that always rankled with him: “Despite being on the Board and despite setting standards, sometimes I felt like an outsider. The founders met among themselves often and neither I nor Balakrishnan ever became part of this private club. I felt that this manifested in the way CEOs were picked. Murthy had said that the best person would become CEO but it was his co-founders who would take the job time and again. We all hold Murthy in such high regard that we expect him to be nothing but perfect, but no man can be 100 per cent perfect. I believe Murthy is an extraordinary entrepreneur, the best India has had, I would say even ahead of JRD Tata and Dhirubhai Ambani, because it was Murthy who gave middle- class Indians respect and recognition globally. He had started with nothing and was competing globally,” Pai says.
IN 2011, PAI decided to leave his stamping ground for a wider stage. His friends, a group of lawyers and accountants he went to school with and who have known him for nearly 40 years now, say they have never seen him as perturbed as on the day he left Infosys. The company had become his chief identity. “He always wanted to work in India’s best company and Infosys gave him that platform. But I felt that while he represented a global company, he had to wear a thin mask, maybe even without realising it. It is after Infosys that he emerged a thought leader,” says Abhay Jain, perhaps Pai’s closest friend since Class VII at St Joseph’s Boys’ High School, Bengaluru. Jain, who is now advisor, corporate affairs, Manipal Education and Medical Group, has also worked closely with Pai on Akshaya Patra, a landmark midday meal scheme for 1.6 million children. It started in 1999 when the two happened to visit the ISKCON temple in Bengaluru and saw it was equipped to cook large quantities of prasad. “Mohan asked me, can you supply food to government schools? I agreed, but asked that he donate a vehicle to ferry the food. Soon I had a fat file staring at me, with requests to feed one lakh children. All this within a couple of months, when we still had one vehicle and were serving 1,500 children,” says Madhu Pandita, president, ISKCON Bangalore, crediting Pai with sowing the seeds of a project that would spread to 11 states. The Akshaya Patra Foundation was set up as a secular, non-profit organisation in 2000 after Jain organised a meeting with Murli Manohar Joshi, who remarked that what they were trying to build was like the akshaya patra, the inexhaustible vessel from the Mahabharata. The reason Mohandas Pai has been at the heart of several such epic stories is because he learned early in life to stand up for what he believed in, says his classmate KS Ravishankar, now a noted practitioner of indirect law in Bangalore. In college, he remembers, Pai led an open agitation against the erratic evaluation of their second-year accounting paper. “The university ordered a re-evaluation, which was unheard of in those days,” says Ravishankar, who shared Pai’s enthusiasm for reading and exchanged notes with him on Churchill’s speeches, John Kenneth Galbraith and the origins of Indian civilisation. “In any case, he was a rebel and a sharp one at that. He gave the teachers a run for their degrees,” Ravishankar says.
“In the end, we only have memories, don’t we?” says Pai, looking out of place in Manipal’s plush new office on the 15th floor of JW Marriott in central Bangalore, overlooking the green expanse of Cubbon Park. “And they are enough,” he says.