Nilekani, who owns 1.41 percent of the stock, is now one of India's richest women. She calls herself an "accidental philanthropist" because of her accidental wealth.
"I felt very uncomfortable when I became wealthy," she says. "One of my ways of dealing with it was to give it forward right away. I believe that any society that allows the creation of legitimate wealth expects that the wealth be used for its benefit."
Early on she used her profits from Infosys to set up a charitable foundation. She soon developed a reputation for philanthropy, and in 2010 Forbes magazine chose her as one of its "48 heroes of philanthropy."
Her reputation for getting involved, rather than merely writing a check, led to her being invited to set up Pratham Books.
Pratham is attacking a huge problem. In most of rural India, children read only textbooks. Reading for pleasure remains a luxury available only to the rich. Even by Grade 5, many children still can't read.
Pratham Books also has to cope with a hugely diverse country with more than 22 languages and innumerable dialects. As Nilekani points out, in India the language changes every 100 kilometers (62 miles). The challenge of reaching children in rural areas who speak obscure dialects is formidable.
Still, she says, everything that Pratham Books does aims to "democratize" reading.
Pratham Books is able to price its books so low partly because it's a nonprofit, subsidized by capital from Nilekani and other donors. Nilekani is unapologetic about this and says that while financial sustainability is a goal, Pratham Books's first priority is social impact.
But Pratham Books also keeps its costs low through continuous innovation. One of its biggest recent successes has been story cards, sheets of laminated paper folded to make a story and priced at only 2.5 rupees (about 4 cents). Children who can't afford books can share and trade these easy-to-read, easy-to-store cards. Ten million have been sold already.