Monday, December 31, 2018

Bharat Desai - Crain's Newsmakers 2018 - Crain's Detroit Business

Bharat Desai is an unlikely billionaire. 

The Kenyan-born electrical engineer immigrated to the U.S. in 1976, working as a temporary programmer for engineering and consulting firm Tata Technologies. The assignment was expected to last six months. Now, 42 years later, Desai remains in the U.S. and is among the wealthiest Indian-Americans in the world after selling his company in a $3.4 billion deal this year. 

Desai, 66, declined to participate in an interview about his rise to the upper echelons of metro Detroit entrepreneurship. 

He founded Syntel Inc. in 1980 with his wife, Neerja Sethi, from their Troy apartment while completing his MBA from the University of Michigan.

Desai learned what worked and what didn’t at Tata and quickly grew his information technology and outsourcing company as the internet age blossomed. The first year of Syntel’s operation amounted to just $30,000 in revenue, but soon it scored a major client in General Motors Co. in 1982.

In the late 1980s, Syntel was early to capitalize on outsourcing information-technology work to India, taking advantage of the low labor costs and educated workforce as U.S. companies sought new ways to control costs while expanding globally in the information age. Syntel went public on the NASDAQ in 1997. Forbes ranked Syntel second on its “200 Best Small Companies in America” the same year of its initial public offering. Desai became a U.S. citizen in 1985. 

“I always wanted to run a business of my own,” The Times of India reported Desai saying at an entrepreneur event in Delhi, India, in 2013. “I was a horrible employee and could not live by anybody else’s rule. So, the best way was to start my own company. My wife is the toughest board member.” 

While other similar firms went belly-up in the dot-com bust of the late 1990s, Desai’s discipline — and apparently his wife’s toughness — stabilized the company through industry trends as it maintained a client list dominated by global conglomerates. Last year, American Express, State Street Bank and FedEx Corp. accounted for 45 percent of its $924 million in revenue, ranking 27th on Crain’s list of largest publicly traded companies in Southeast Michigan.

Syntel, still based in Troy with global development centers in India, Scotland, Poland and the Philippines, and 76 percent of its billable workforce located in India, according to Syntel’s annual report, became an acquisition target for French IT firm Atos SE in 2018. 

Atos agreed in July to acquire Syntel for $3.4 billion in a cash deal. Desai and his wife controlled a 57 percent stake in Syntel, according to The Times of India, which means they walked away with upward of $2 billion when the deal closed Oct. 10. Desai ranked 1,999th on Forbes Richest list before the close of the Atos deal with a net worth of $1.6 billion.

The couple live on Fisher Island, a barrier island near Miami, the wealthiest ZIP code in the U.S., where the average annual income is $2.5 million, according to an April 2018 Bloomberg report.

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