Tuesday, June 03, 2008

The New India Company

Vasu Reddy from Chicago

India’s national interest is in making Indian management and investment successful in the world and outside of its own well defined confines. There is no questioning on the Indian minds being some of the best in all fields of business and global affairs. The technology and information boom of the last decade has transformed services industries around the world with major contributions from Indian resources. Many IT services companies from India have not only become billion dollar profit makers but also become entrenched in every aspect of global technology development. Decades of excellence in medicine and science has always been the Indian forte, but last decade has seen Indian enterprise freely expanding and reaching markets that once were even difficult to visit.

The shareholders of these booming companies have continued to realize the benefits of betting on these now global companies early. Not underplaying today’s volatility of the Indian and global markets, it is nevertheless these IT pioneers have created dramatic and everlasting changes in the Indian economy and life styles, while also attaining the financial results over a decade that please any long term investor. These companies seem to make bold and long term moves to keep growing and entrenching into local markets around the globe. They have started not just to rely on Indian resources, but now actively integrating into global teams, thereby ensuring the acceptability in local conditions while maintaining the Indian component.

Also, the oldest brands in India are no longer being looked down. Tata acquiring Range Rover and Jaguar is a fine example of India’s enterprise is not just competent but is also best suited to tackle global issues and create value for its shareholder’s on a global basis. Any company that bring “Nano” to becoming a reality and also acquire the brands of Range Rover and Jaguar in the matter of months should have the stature of thinking globally. There have been many instances in Steel, Medicine, Manufacturing and Mining that have seen Indian enterprises successfully acquiring foreign entities. Not until recently these examples of once in a blue moon global participation has now become thing of reality for Indian enterprise. IT companies also have been quite aggressive in acquiring companies and resources globally, and auto manufacturers have been exemplary in bring not only brands to India in partnerships but have built long term relationships that have brought technology and abilities that have been making affordable cars while making driving an impossible task.

There is no looking back at this stage as Indian economy is able to withstand the downturns and inflation comparatively as well as other developed nations. The daily discussions on the value of the Rupee and price of gold in global standards are indicative of capital markets that prosper in democracies. Market forces are being driven independent of politics, although a touch of bureaucracy is still a model of functioning in India.

Bharti and Reliance going after a company such as MTN is a great example of the telecommunications companies of India coming of age. There are no absolute leaders in telecom, and whosoever has the money and the ability to convince the regulators of the world can become a part of the global telecom management. It will be wonderful for Indian entities becoming a part of the overall management of global markets in telecom. Te Indian success with bringing value to all customers with mobiles and communications can add to the still growing markets in developing nations and further drive the economies of these markets. There is no immediate end to value addition to the communications markets and many of them still are in their infancy with market penetration and services.

If there is a model of success in telecom that the Indian markets have derived in the last five years, and if it can be deployed in other nations, the value of such exercise can flow into other commercial and trade arrangements enhancing the ability of Indian enterprises to do business in countries where there is little or marginal trade today.

The participation in a global telecom market will also influence the Indian economy to start looking at external forces to drive further changes into its commercial, financial and banking practices that will eliminate any current impracticality of the emerging systems to be more competitive and proactive to deal with the global Indian company. While India continues to embrace systematic approaches to regulations, it still has enormous strides to make in policies and procedures for fully market driven business environment. The global Indian company can begin to eliminate negative market forces that may have curtailed the real possibilities of what the country’s true potential could be.

Emerging into a global company can be quick and managing globally should not be a great task, provided the Indian company believes and behaves as a global entity. The continued privilege of the large enterprises in India is not a part of the global culture, but each country has its own local giants. When you combine these diverse but likely benefactors the benefits can be immediate and enormous. About 20 years ago India was looked on as a third world (along with China and Brazil) country, and today it has made giant strides in growth in real and human capital.

If there is an opportunity to expand the Indian company it is now time. Many countries can use the learning of the Indian company from the past two decades, and build similar and local models for dramatic economic growth. Communications will help every individual and rapid growth in communications will lead to rapid economic growth.

The big Indian company should start aggressive and good deal making, while embracing the global markets. Size matters in being big, and seizing the opportunity to become global should be done now, and with great care and organization that will continue to foster the growth of the Indian company and the markets it embraces.

No comments:

Past Perfect

Vasu Reddy from Chicago vasureddy@aol.com It has already happened. Past is already on the books, recorded, and can’t be changed.   It ...