Not many eyebrows were raised when it was announced on Thursday that Azim Premji would hand over the reins of Wipro to his eldest son Rishad. While the senior Premji’s impending retirement after 53 years will mark the end of an era, many in the industry see it as a natural progression that Rishad should be tasked with carrying forward the legacy of one of India’s most high-profile IT services companies.
While some view Rishad as merely the custodian of the Premji family’s wealth -- the family and associated entities own 74% stake in the Bengaluru-based IT behemoth -- others say that the Harvard graduate has proved himself as an able administrator who has earned his chops.
After all, the 42-year-old chairman-elect has already spent more than a decade at Wipro. As chief strategy officer and a board member, he has earned goodwill across the organisation. Before that, he learned the ropes at consulting giant Bain & Company and financial services company GE Capital.
"Rishad has been groomed to take up the role and is not being parachuted into it," said Shriram Subramanian, founder of InGovern, a proxy advisory firm. “While the journey to the chairman might have been slightly accelerated, his appointment will be well received within the company.”
According to Wipro, Rishad led the company's acquisition of Gallagher Financial Systems (now called Wipro Gallagher Solutions) while also spearheading the integration of Citi Technology Services following Wipro’s buyout of the US-based Citibank captive in the application and infrastructure space.
Beyond Wipro, he won the confidence of peers during his recent stint as chairman of IT lobby Nasscom, where he decided to do away with the long-standing practice of forecasting annual growth.
"[Azim] Premji is not someone who would appoint Rishad just because he is his blood. He would do so only if he thought that Rishad was competent and would do what is right for Wipro," said a senior industry executive who did not wish to be named.
One thing is for sure. Rishad has his task cut out if he is to return Wipro to its heyday of the 1990s.
Wipro, which has annual revenues of $8.5 billion. has consistently trailed peers Infosys, Cognizant and HCL over the past decade in terms of earnings growth. This has been partly owing to the company’s larger exposure to the manufacturing and engineering verticals as well as oil & gas.
"Wipro's unlisted firms have been doing well. However, they have had a challenging period with leadership changes slowing the pace of growth,” said the executive cited above. “The company is still at a scale where it can rediscover its mojo. With clarity on the transition, and Rishad's experience in working with cutting-edge technology startups, he can be an asset. However, we don't know about his decision-making capabilities, as for a company of Wipro’s size, no decisions are made by one person.”
One of the founders of a large IT services firm, who wished to remain anonymous, said that he expects Wipro CEO and managing director Abidali Neemuchwala to take centre stage in daily operations.
For his part, in an email to employees after the announcement, Rishad said that the company must chart new paths and win new frontiers while consolidating its strongholds. He added that Wipro should stand committed to its values while chasing greater heights.
"As long as he is forward-looking and dynamic to see the transformation the industry is undergoing, people will accept it," said the aforementioned co-founder of an IT services firm.