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Episode 106 · Enterprise · 48 min

Building the same company twice

He organised Indian recruitment when it was ten thousand one-man placement agencies, sold at ₹1,000 crore with 72,000 deputies on the rolls, then sat out a three-year non-compete and had to win an arbitration to get his own brand back. CIEL HR is the second attempt — ₹1,100 crore in nine years, compounding at 51% a year against an industry's 15% — inside a market that has swollen to ₹1.76 lakh crore while he was in politics.

Founder journey Hiring & talent Leadership & org

K Pandiarajan

Founder & Chairman, CIEL HR · with Vishal Krishna

47:46

Said in this episode

▶ 20:16

₹1.76L cr

Size of India's HR services industry

Up from the ₹10,000 crore industry he left in 2010; he says it crosses ₹2 lakh crore for the first time this year, across nine distinct segments.

▶ 24:55

51% vs 15%

CIEL's five-year CAGR against the industry's

Roughly three times market growth, taking CIEL HR to about ₹1,100 crore and number eight in the industry nine years after restarting.

▶ 5:40

276

Shareholders before venture capital existed here

Friends, relatives, employees and employers who backed Ma Foi between 1992 and 2000; smallest cheque ₹3,000, largest around ₹40 lakh, all exited at 14–24x in 2004.

▶ 6:24

₹8.5 cr

India's first venture round in HR, in 2000

From three VCs, against a ₹10 crore turnover that already made Ma Foi the market leader; half of it went into brand building.

▶ 8:03

7% vs 1%

Top-of-mind brand recall versus the nearest rival

The result of being the first firm in Indian recruitment to spend on a brand at all, alongside four international offices opened simultaneously.

▶ 16:55

72,000

Deputies on the rolls at the 2010 exit

Plus 2,000 permanent employees in a ₹1,000 crore company; CIEL today runs about 790 full-timers and 36,000 deputies.

The brief

The argument in sixty seconds

Pandiarajan's claim is that India's HR services industry has been built twice — once by him, and once around him while he was away in politics. In 1992 recruitment meant ten thousand mostly one-man placement agencies and twenty pages of newspaper classifieds; Ma Foi made professional recruitment a category, introduced flexi staffing with an overseas deputation in September 1992, and funded itself with 276 small shareholders — cheques from ₹3,000 to ₹40 lakh — before raising the first venture round in Indian HR, ₹8.5 crore in 2000. It exited at ₹1,000 crore into a Dutch multinational at what he still calls a very poor valuation, though those 276 shareholders took 14 to 24 times their money. What he returned to is a ₹1.76 lakh crore industry with nine segments, twelve multinationals, listed players and private-equity money, crossing ₹2 lakh crore this year — and CIEL HR, number eight at ₹1,100 crore and growing roughly three times as fast as the market, is his attempt to reach the top five before a BSE and NSE listing in the next five or six months. The through-line is not technology. He argues companies are no longer built to last but built to value, that an office now spans ages 21 to 77 and needs reverse mentoring to hold together, and that the constant since the 1984 HR textbook he studied at XLRI is the boss-subordinate relationship. AI, he insists, has stopped being a threat to jobs: the more tech arrives, the more personalised the culture has to become.

Worth your time if you are

Staffing and recruitment operators sizing a ₹2 lakh crore market

Founders who sold a company and signed a non-compete

CHROs rebuilding performance systems around OKRs

Anyone raising early equity from friends, relatives and employees

HR-tech builders selling into Indian enterprises

Episode map

Where the conversation travels

Every block is a chapter, coloured by what it's about. Click any of it to jump straight to that minute on YouTube.

Founder journeyHiring & talentLeadership & orgGCCs & servicesFundraisingAI & machine learning

01Cold open: a match factory near Sivakasi 0:00 Vishal introduces the 'OG' of Indian HR, and Pandiarajan traces the line from a village near Sivakasi and a father in a match factory — lost when he was three months old — through engineering, an MBA at XLRI Jamshedpur and nine years of employment to the company he and his wife founded on 15 August 1992. 021992: ten thousand one-man agencies 1:36 In the liberalisation years HR meant recruitment, recruitment meant some ten thousand mostly one-man 'placement agencies' and twenty pages of newspaper classifieds, and Ma Foi set out to make professional recruitment something other than an oxymoron — pioneering flexi staffing here with a first overseas deputation for an EPC client, Foster Wheeler, in September 1992. 03Body shopping, Y2K and Apple's 250 hires 3:42 The punchline was 'let's engineer your future overseas' and the niche was Indian engineers for EPC and process-power projects, until the 1997 IT boom and Y2K made the market ten to a hundred times bigger — with Apple's 1994 India entry handing Ma Foi an exclusive mandate for almost 250 people including five directors, on a stated target of doubling revenue every year. 04276 shareholders, then India's first HR VC 5:19 Equity came from friends, relatives, employees and employers — 276 of them, crowdsourcing before the word existed — until 2000 brought ₹8.5 crore from three VCs, the first venture round in Indian HR, funding a candidate-centric dotcom, four international offices opened simultaneously, and the industry's first serious brand spend, which bought 7% top-of-mind recall against the nearest rival's 1%. 05The Dutch buyer and 14–24x 8:14 In 2004 a Dutch multinational became the first foreign buyer into Indian HR and took out all 276 shareholders at 14 to 24 times their money — cheques that had started at ₹3,000 and topped out around ₹40 lakh — after years in which his wife, a chartered accountant, ran the shareholder relationship and paid out 20% and later 32% dividends. 06Process, values and a ₹1,000 crore machine 9:33 Asked how a company holds process when capital is easy, he goes back to a mission anchored on dignity, diversity, growth and professionalism, to institutional and management-council meets funded even when the company was tiny, and to nine long-serving direct reports who let Ma Foi run operations in about eighteen countries and grow from market leadership at ₹10 crore to ₹1,000 crore. 07Babri, a manpower ban, 90% interest 12:31 The question about stress produces the near-death story: ₹10 lakh spent touring eighteen or nineteen countries and over 7,000 profiles delivered, then the Babri Masjid demolition of December 1992 and a year-long ban on Indian manpower across Middle Eastern countries, Malaysia and Indonesia — leaving him borrowing at 80–90% 'meter' interest in Chennai and pushing a 25-person team into compensation and market surveys to survive. 08Dotcom deaths, a poor exit, a brand bought back 15:34 Fifteen HR dotcoms that raised after Ma Foi died in the bust and only two survived; then a hostile takeover of his Dutch acquirer coincided with his 2009 run for Parliament, and a ₹1,000 crore company with 72,000 deputies, 2,000 permanent employees and eight lines of the HR value chain went at what he still calls a very poor valuation — so he bought the brand back through an arbitration that concluded only in 2019, and started CIEL HR in 2015 once a three-year non-compete lapsed. 09The industry that grew while he was away 19:20 He left a ₹10,000 crore industry in which Ma Foi's ₹1,000 crore was a tenth of the market and came back to a ₹1.76 lakh crore one with nine distinct segments, twelve multinationals, listed Indian players and private-equity money — a market in which being number eight means something entirely different. 10Eight businesses along the HR value chain 21:00 The group tour: recruitment and staffing at CIEL, an acquired digital-first assessment and leadership-development firm that outranks global profiling brands in India, a women-leaders programme whose first four-month cohort ran 1,174 strong, Ma Foi as the consulting brand, payroll and compliance rebuilt into a top-ten player years after he sold that business to ADP, IT-staffing and digital-learning acquisitions, managed services for IT and auto, and about 6,000 apprentices under the national scheme — ₹1,100 crore in all, compounding at roughly 51% against the industry's 15%. 11OKRs, transience and offsites with depth 25:20 Asked what a modern organisation actually wants, he answers performance systems — OKRs anchored fast at board, council and member level, HRMS demand that has already minted unicorns in Indian HR services, and offsites that have turned from fun trips down Chennai's ECR into anchored 'mind expansion' sessions — because companies are now built to value rather than to last, and the horizon for every intervention has collapsed. 12₹2 lakh crore, and a 21-to-77 workforce 30:00 The industry crosses ₹2 lakh crore this year on demand for flexibility, and his newest product is transition coaching — assessment blended with coaching for the over-40s companies quietly write off — inside offices whose age span now runs from 21 to about 77, where he argues the 30-under-30 and 40-under-40 lists need a 60-over-60 companion. 13In-house tech teams and reverse mentoring 32:25 Every organisation now wants its own tech team instead of buying everything out, outsourcing-led tech growth is over and a NASSCOM read of roughly 3% export growth against 10% industry growth says the domestic market is carrying the load — while reverse mentoring, tested on some 250 CHROs at a recent workshop, becomes the glue across widening generation gaps. 14AI is not the threat; the boss is the product 35:10 He calls the AI-takes-jobs threat gone, says the companies that use AI powerfully will be the survivors and that all six of the group's digital assets have been rebuilt on AI platforms as the SaaS wave gives way — but the constant since the 1984 HR textbook he studied at XLRI is the dyadic boss-subordinate relationship, which the corporate world is rediscovering as its best retention tool. 15790 staff, 36,000 deputies, and an IPO 37:30 CIEL calls itself Ma Foi version 3 on the same values, plans a BSE and NSE listing in five or six months to fund a run at number one, and will grow by acquisition this time — two done, three planned — while the politics he left after ten years, two terms as MLA and five as a minister, comes back as 'macro HR', governance instinct and a route into a skilling market where roughly ₹21,000 crore of government money is spent. 16Mentors, Thirukkural and a Tamil futurist 42:10 He closes on influences: V Krishnamurthy, the former Maruti chairman who gave a young engineer the run of the world and uncovered his latent entrepreneurial streak; The World is Flat and a Korean founder's rags-to-riches memoir; the Thirukkural, rewritten with a new perspective for every generation; and a Tamil science-fiction writer and electronics engineer who imagined an AI revolution decades early — before a parting bet that much of the pioneering work in AI will come from India.

Takeaways

Ideas to carry out of this hour

The industry grew seventeenfold while he was out of it

When he sold in 2010, Indian HR services was a ₹10,000 crore industry and Ma Foi's ₹1,000 crore was a tenth of it — market leadership. He returned to a ₹1.76 lakh crore market with nine distinct segments, twelve multinationals, listed Indian companies and private-equity money, and says it crosses ₹2 lakh crore this year. Being number eight at ₹1,100 crore today is therefore a much smaller slice of a far larger prize than being number one used to be, which is the whole reason for the second run.

▶ 19:20 ▶ 20:08 ▶ 30:08

Crowdsourced equity was necessity, not strategy

Between 1992 and 2000 Ma Foi took equity from 276 friends, relatives, employees and employers, some for as little as ₹3,000 and the largest around ₹40 lakh, paying 20% dividends and later 32%. He is explicit that this was forced on him: after the manpower ban wiped out his overseas pipeline he was borrowing at 80–90% 'meter' interest to stay alive, and small equity cheques were the cheaper money. When the Dutch buyer arrived in 2004, those shareholders took 14 to 24 times what they had put in.

▶ 5:35 ▶ 8:29 ▶ 15:23

A ban in the Gulf built the eight-line HR business

He had put about ₹10 lakh into visiting eighteen or nineteen countries and delivered over 7,000 profiles when the Babri Masjid demolition in December 1992 led Middle Eastern countries, Malaysia and Indonesia to bar Indian manpower for a year. With 25 to 30 people to keep employed, the team took on anything it could do itself — compensation and benefit surveys, market surveys. His claim is that today's presence across all eight elements of the HR value chain is a direct inheritance of that scramble.

▶ 13:57 ▶ 14:14 ▶ 15:02

Selling well is not the same as timing well

The company he sold had ₹1,000 crore of revenue, 72,000 deputies, 2,000 permanent employees and eight parts of the value chain — and still got what he calls a very poor valuation, because his Dutch acquirer was itself in the middle of a hostile takeover while he was running for Parliament in 2009. The asset he deliberately retrieved was the brand, and even that took an arbitration that only concluded in 2019, nine years after the exit.

▶ 16:40 ▶ 16:55 ▶ 17:10

Companies are built to value, not to last

His diagnosis of the modern organisation starts with transience: valuation, not longevity, determines where a company stands, so the intervention horizons that once ran over years now run over weeks. That is why he sees OKRs anchoring so quickly at board, management-council and member level, why HRMS demand has minted unicorns, and why offsites have shifted from beach trips to anchored 'mind expansion' sessions. A young joiner is expected to deliver within a year and to build an identity inside an organisation whose own identity has already changed.

▶ 26:38 ▶ 26:52 ▶ 29:26

The office now spans 21 to 77, so mentoring runs both ways

Lifespans are stretching, retirement is dissolving, and he argues the 60-to-65 band is now as productive as the 40s once were — which is why he wants a 60-over-60 list next to the 30-under-30 and 40-under-40 ones his team runs. The glue is reverse mentoring: the youngest employees coaching their bosses on new technology and new gadgets, a practice he tested on around 250 CHROs at a recent workshop. Transition coaching, blending assessment with coaching for people companies quietly write off after 40, is the product built on the same premise.

▶ 31:17 ▶ 32:05 ▶ 33:54

AI is not the job threat; the boss-subordinate bond is the product

He states flatly that the threat of AI taking away jobs is gone, and that the companies which use AI powerfully will be the survivors — all six of the group's digital assets have been rebuilt on AI platforms as the SaaS wave gives way. But the thing that has not moved since the 1984 HR textbook he studied at XLRI is the dyadic relationship between a boss and a subordinate, which he says the corporate world is rediscovering as its best retention tool. Hence his rule: the more tech arrives, the more personalised the culture has to become.

▶ 35:26 ▶ 36:29 ▶ 37:16

Politics is macro HR, and it is a route to market

Ten years in politics — two terms as an MLA, five years as a minister — read to him as HR at the level of society: knowing your constituency, defining an identity and a culture, applying governance principles. The transfer back is practical as well as philosophical, because governments are large clients: skilling in India runs largely on government money, roughly ₹21,000 crore of it, and CIEL is already working with about six government schemes, CSR-funded programmes and two institutional skilling properties. It is also one of ten licensed third-party aggregators under the national apprenticeship scheme, with nearly 6,000 apprentices on its rolls.

▶ 39:54 ▶ 40:58 ▶ 40:40

The numbers, drawn

What the episode measures

Every figure below was said on air — timestamps included, caveats kept.

Conversation share

portion of the hour spent on each theme

Founder journey26%

Hiring & talent22%

Leadership & org16%

GCCs & services12%

Fundraising10%

AI & machine learning6%

Computed from the chapter map of this episode.

The industry he left, and the one he came back to

₹ crore

As stated in conversation: a ₹10,000 crore industry when he sold a ₹1,000 crore company, ₹1,76,000 crore now, and crossing ₹2 lakh crore for the first time this year.▶ 20:16

Revenue at each act of the story

₹ crore

Milestones as stated in conversation: ₹10 crore made Ma Foi the market leader in 2000; ₹1,000 crore at the 2010 sale; about ₹1,100 crore at CIEL nine years after restarting — his highest ever, but now only number eight.▶ 24:31

Worth keeping

Lines that stay

Companies are not really built to last, companies are built to value — the next valuation determines where you are. The longevity of companies is a thing of the past.

— K Pandiarajan ▶ 26:45

AI taking away jobs — that threat is gone. Companies which can use AI powerfully will be the survivors in the future.

— K Pandiarajan ▶ 35:26

The more tech happens, the more personalised the culture needs to become.

— K Pandiarajan ▶ 37:16

You quit because of your boss, and you remain because of your boss.

— K Pandiarajan ▶ 36:53

Politics is to me macro HR. HR at the enterprise is micro, at the individual level; macro HR is at the level of society — and politics is nothing but macro HR.

— K Pandiarajan ▶ 39:54

Clips that travel

Short on time? Start here

Recruiters who have only ever known digital job boards

Ten thousand one-man placement agencies

What hiring looked like in 1992 — newspaper classifieds as an industry, professional recruitment as an oxymoron, the first flexi-staffing deputation, and Apple's 250 hires.

1:36 → 5:19 · 4 min ▶ Watch clip

Founders raising early money from friends and employees

276 shareholders, some in for ₹3,000

Crowdsourced equity before the word existed, India's first venture round in HR, and the 14–24x payday when the first foreign buyer arrived.

5:19 → 9:33 · 4 min ▶ Watch clip

Anyone running a company through an external shock

The year the Gulf stopped hiring Indians

A year-long manpower ban after Babri, 7,000 profiles wasted, borrowing at 80–90% interest, and the desperate diversification that became the whole value chain.

12:31 → 15:34 · 3 min ▶ Watch clip

Operators sizing the Indian staffing market

The industry he came back to

₹10,000 crore to ₹1.76 lakh crore, nine segments, twelve multinationals — and a tour of the eight-company group he assembled to attack it.

19:20 → 25:20 · 6 min ▶ Watch clip

CHROs planning for AI and a 21-to-77 workforce

AI, ageing, and the boss-subordinate bond

Why he thinks the AI job threat is over, and why an idea from a 1984 HR textbook is the retention tool every company is rediscovering.

35:10 → 37:30 · 2 min ▶ Watch clip

Glossary

The jargon, unpacked

Flexi staffing

Employing workers on the staffing firm's own payroll and deputing them to client companies — the model Ma Foi introduced in India in 1992 and the largest single segment of the industry today.

Deputy

A worker carried on a staffing company's rolls but working inside a client organisation; CIEL has about 36,000 of them against 790 full-time employees, and Ma Foi had 72,000 at its sale.

Body shopping

The 1990s practice of supplying Indian engineers to overseas projects head by head — the engineering-consulting precursor to today's IT and EPC professional staffing.

EPC

Engineering, procurement and construction — the project-contracting industry, and the niche where Ma Foi placed its first overseas deputation in September 1992, before the IT boom dwarfed it.

NAPS

The National Apprenticeship Promotion Scheme, under which licensed third-party aggregators carry apprentices on their rolls at host companies; CIEL is one of ten such aggregators, with nearly 6,000 apprentices.

OKRs

Objectives and key results — the goal-setting system he says Indian companies are adopting at speed because it makes the boss-subordinate relationship and cross-team alignment explicit.

HRMS

A human resource management system: the software spine for payroll, performance and engagement, and a category that has produced unicorns among India's three HR-services unicorns.

Top-of-mind recall

The share of people who name a brand first and unprompted in its category — Ma Foi reached 7% at a time when the next recruitment firm sat at 1%.

Connections

If this resonated, go here next

EP 111 · Enterprise

Full transcript

The whole conversation, searchable

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