There was a time when the biggest company in the country’s nascent IT industry was not TCS, Infosys, HCL or Wipro or any of the other giants of today. This crown belonged to CMC Ltd., which was incorporated in December 1975 as Computer Management Corporation Pvt Ltd (CMC), with the Government of India (GoI) owning 100% of its share capital. Less than two years later, it was transformed into a public limited company, although still 100% owned by the government.
CMC was born just before IBM left the country following its refusal to adhere to FERA standards. Big Blue’s exit created a huge divide since most mainframe installations in the country at this point were from IBM. These needed maintenance and upkeep and CMC was filled in to look after hundreds of these computers. In a short time, it also extended its services to other machines, but also extended to the development of broader IT solutions, mainly for the government, in areas such as railway reservation, distribution electricity and education.
It also became one of the first IT companies to spot prospects for exporting software services to the United States, and in 1991 probably made the first cross-border acquisition by an Indian IT company when it bought Baton Rouge. International Inc, USA. By then, it was already a Rs 100 crore business.
The early 1990s was truly the heyday of CMC, as it sought to refute the idea that public companies were all lazy and lacking in entrepreneurship. A visit to his well-located office in South Delhi showed the change of mood with an art gallery, with paintings by artists like Francis Souza and Ganesh Pyne, greeting the visitor.
In 1992 the government sold 16.69% of its stake in the company to the General Insurance Corporation of India and in 1993 the shares of CMC were listed on the Hyderabad Stock Exchange and the Bombay Stock Exchange ( BSE).
As part of its aggressive divestment plan, the government of Atal Behari Vajpayee in 2001 sold 51% of CMC’s equity to Tata Sons Ltd, and in 2004 sold its remaining 26.5% stake to the public. Given the government’s problems in its bid to divest from Balco and Air India, the smooth sale of its majority stake to the Tata Group was a huge relief although the sale was not without its share of drama. While a number of companies initially expressed interest in buying the stake, just days before the deadline for submitting financial bids expired, Tata Sons was the only bidder remaining after the others withdrew from the race. Eventually, the group bought the proposed 51% stake for Rs 152 crore and years later, in October 2014, the CMC board agreed to merge the company with TCS.
It was a poignant moment as nearly 25 years ago Tata Consultancy was initially approached for the computerization of the Bombay Stock Exchange. However, difficulties in importing computers allowed CMC to gain a foothold and win the contract.
—Sundeep Khanna is a former editor and co-author of the recent Azim Premji: The Man Beyond Billions. Views are personal