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Articles: My Thoughts | The World Is Just Not Enough
- Mr. Nitin Chowdary Donepudi
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Hi Friends, Go thru this article which I colleted from business magazines and let me know your part of Yagna_India
The World Is Just Not Enough
The Indian MNC is here. In case you can’t see them clearly, it is because this number is still small. There are a few key drivers of this trend. Most important among these is the changed mindset of company managements. Indian managers are thinking global. They think in terms of global competitiveness, global ranks with respect to capacity or revenue and global market shares.
It is not just a megalomaniac Reliance or an aggressive Ranbaxy, even more conservative companies like M&M or BILT are thinking about global sweepstakes. Ranbaxy wants to be amongst the top 5 global generics companies by ‘12. M&M wants to become a leading global tractor company by ‘05, while BILT calls itself the ‘only Indian company amongst the top 200 paper companies in the world’. Another driver will be rising share of exports in company sales. In the last 3-4 years, there has been a huge jump in the number of companies exporting 20-25% or even more of their sales.
About a quarter of the Indian companies export more than 20% of their sales. Currently, about 30 companies have exports more than Rs 500 crore, 80 companies have exports more than Rs 200 crore and about 150 companies have exports more than Rs 100 crore.
It is not just IT, BPO, pharmaceutical or textile companies that have large export numbers. Companies making metals, petro-products, engineering goods, auto, auto ancillaries and even television sets are now beginning to export in significant chunks. A move from traded exports to direct (or closer) physical presence is a natural progression.
Acquisitions will be another important driver in the evolution of the Indian MNC.
Now combine these trends. Think about a company with significant exports, global mindset, a war chest of either cash or market cap and an aggressive management. You have the potential MNC. There are many such companies in India now, and they are waiting to emerge from their shells.
Reliance’s acquisition of FLAG Telecom is a good case. In one stroke, Reliance is now on the global stage in the telecom business. M&M, which didn’t want to acquire Punjab Tractors, made a bid (ultimately unsuccessful) to acquire Valtra, a Czech tractor maker. M&M sees itself as a global major in tractors. It already has an assembly plant in the US. Metal companies may also opt for global acquisitions, taking a leaf out of LN Mittal’s book. Non ferrous metals major Sterlite wants to list only on the New York Stock Exchange and be perceived as a global company. One may also see a big acquisition from Tisco. It is reportedly looking at some East European companies closely. Another interesting case is ICICI Bank. Lalita Gupte, ICICI Bank deputy managing director, has the mandate of taking the ICICI brand global.
The new entrants to the ranks of MNCs will differ in a very important way from the first few Indian MNCs like Ranbaxy, Essel Propack, Tata Tea, Asian Paints, Hindustan Inks or the Aditya Birla Group. The ones just named are isolated cases with a visionary top management. The new entrants are the result of a wider process of evolution, a more natural progression of increasing size and large-scale change in mindsets.
Indian Companies Emerging from their shells
Eighteen Indian companies, including software and entertainment giants, make it to the Forbes magazine's list of 200 successful companies outside the US with annual sales of under $1bn. The magazine specially takes note of the Indian entrepreneurship in the tight world market, pointing out that the number of Indian companies has gone up to 18 this year, from 13 last year and about 10 a year earlier
On this year's list are four software innovators (Wipro, Infosys Technologies, Satyam Computers and Rolta India), four pharmaceutical companies (Dr Reddy's Labs, Ipca Laboratories, Nicholas Piramal, Sun Pharmaceutical), three banks (Corporation Bank, HDFC Bank and Oriental Bank of Commerce) and two containers and packaging firms (Cosmo Films and Essel Propack). Zee Telefilms, Asian Paints, Bharat Forge (metal fabricators), Graphite India and Indo Gulf (fertilisers) also find place in the coveted list.
Forbes pays tribute to the initiatives taken by Essel Propack, which has a become a major player in the laminated tube markets, selling 350 crore tubes a year and is supplying the product to multinationals. Every third laminated tube sold worldwide is made by Essel and its vice chairman Ashok Geol is quoted as saying that the company plans to make that every second tube.
The magazine says India is a special case as it has some “pretty big fish” swimming among the 200. Two software titans, Infosys and Wipro, were earlier this year in the magazine's big-company A-list as their market capitalisation is in excess of $5bn.
Looking beyond these behemoths, Forbes says, are companies like Zee Telefilms, which runs a Bollywood studio and a cable TV operation. Its films may have higher profile internationally, but the magazine quotes lead manager of Price International Discovery Fund T Rowe as saying that it is other half of the company that needs to be watched. “It will benefit from an expanding middle class on the subcontinent and is branching out to serve expatriates with its increasingly global brand,” Forbes says.
The Indian contingent, it writes, covers a broad industrial range from software and entertainment industries to widget-makers like Bharat Forge, Essel Propack and Graphite India, pharmaceutical that include Dr Reddy's Labs and financials such a HDFC Bank. The magazine notes that Dr Reddy’s spent 8% of sales on research and development last year and this year, the target is 10%.
The 200 successful companies were drawn from among 19,000 publicly traded concerns with annual sales below $1bn. The magazine screened out most corporations that did not have operating margins of at least 5% in the latest year and average equity return of at least 5% over the past five years.
So I have this entrepreneur bug that has been hitting me for a long time and a thought of doing something different. I hope this article will effect u to be attacted by that BUG.
With Best Regards., Nitin
Work Hard But .......... Smartly
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