Infosys Technologies CEO Kris Gopalakrishnan was in the news for reasons beyond his executive responsibilities at the company. He tells FE?s Goutam Das how the firm is earning a reputation of being too conservative with its cash.

Many Infosys executives expect you to be the next chairman.

The nominations committee will decide who the chairman will be. The committee will look at a set of candidates. Potentially, you can look at an Indian or a non-Indian, internally or externally. Internally, the candidates would include existing board members or other executives. All these are possibilities.

Infosys has $3.9 billion in cash. What do you plan to do? Some industry watchers feel Infosys can lose its top position if it remains too conservative with big ticket buys.

If you look back, 70-80% of the acquisitions fail to deliver the value they are supposed to. It is difficult and challenging to make a large acquisition work. Hence, it is important to be careful in selecting the company for acquisition. In the case of a services company, you need to retain the employees. We have done some small acquisitions. We have a team actively looking at acquisitions and they are evaluating.

Are you still pursuing smaller companies?

Typically, we would look at a company of $300-500 million in revenues and having 3,000 to 5,000 employees.

What has been your experience with past acquisitions?

Acquisitions have worked very well for us. When we made an acquisition in Australia, it had $35 million in revenues. Today, it has crossed $350 million. The recently acquired McCamish will take some time.

Your role in the firm has evolved.

There are a lot of requests for travel. I am the chairman for the southern region for CII. All that has added to my interface outside the company. It has been happening for quite some time now.

You said the regulatory environment currently is a challenge. Please elaborate.

Changes in immigration rules, reducing the number of work permits, increasing the cost of visas, all of these are based on increased regulations. Costs have gone up for the visas. It is small but more than the cost, the intent behind all this is the cause for concern. Normally, you would like to see an environment where there is a free movement of people. In the short term, it is not going to have an impact. But in the medium to long-term, you may have to look at changing the business model, increasing offshore, recruiting more people locally, and investing in other geographies. So we will have to restructure the business. If you are able to do it properly, you will be able to compete successfully. We don?t know what else could happen in terms of regulations. When the US elections are over, there may be less pressure.

Why has the subsidiary, formed to tap US government work, taken off slowly?

It is slow to take off because when you work with government in the US, there are a lot of regulations you need to follow. First of all, we need to understand the set of regulations. There is also a need to create a system or a business process to comply with their requirements. We also need to recruit the right people. Slowly, things are talking shape and you will see progress.