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Indian Companies Increasing Foreign Acquisitions; More Companies "Indianized"

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Indian companies have become matured, while tough competition remains within the domestic market of the country, Indian companies are exploring more markets and adding more dimensions of competition. In the last decade we saw growing number of acquisitions by Indian company not only of smaller brands but also of much bigger and prestigious brands. In our previous article we discussed how the former colony India has been acquiring more businesses in the UK and “Indianizing” them, becoming the largest employer in the private sector of the UK. It is observed that Indian companies in a collective manner targeted UK businesses more actively, it could be unintentionally or may be some kind of nationalism. Indian companies are now equally active in the rest of the geography in the race to secure resources and technology.

In a report by Columbia University, India has gushed as the world’s 21st largest outward investor, having more than US$75 billion in foreign investment in the last decade. In another report by the Reserve Bank of India, during 2009-10 alone, the investments by domestic Indian companies in overseas joint ventures and wholly-owned subsidiaries stood impressively at US$10.3 billion.
Year 2000. One of the first major overseas acquisition by an Indian company was the acquisition of popular UK brand Tetley. Tata Tea in 2000 acquired Tetley for US$407 million. At the time of acquisition Tetley had three times the turnover of Tata Tea in India, but now it is the front runner brand of Tata Global Beverages and has made its successful presence in over 70 countries offering nearly 500 different varieties of popular tea.

Year 2003. In the year of 2003, one of the key Korean based commercial vehicle company, Daewoo was acquired by Tata Motors. Daewoo was famous for the cars Cielo and Matiz. After the acquisition Daewoo cars disappeared from Indian markets. Today Tata Daewoo is in the heavy vehicle business with its manufacturing and assembly mainly in Korea, India and Pakistan (Afzal Motors).

Year 2005. The confidence in the management of the Tata boosted so high that one by one it acquired more companies in US, South Africa and East Europe making it world’s second largest branded tea maker. US herbal and green tea brand Good Earth was bought by Tata Global Beverages in 2005.

In another move in the automobile industry Tata Motors bought one of the largest manufacturer of bus and coach cabins in Europe, Hispano Motors Carrocera in 2005. Apart from their main plant in Zaragoza, Hispano also has another facility across the Mediterranean sea in Africa, Casablanca, Morocco. Their combined capacity is to produce nearly 2.000 unites per year. With this acquisition Tata also brought a number of jobs by bringing manufacturing of Hispano bodied buses in India at ACGL plant in Goa. These buses are known as Tata Divo.

Tata Hispano
Why doesn’t Tata launch these buses in India? Variant of Tata Hispano Globus can be seen plying on the airports which lack functioning aerodrome facilities. Photo by Motor India

Later, in the same year Tata made another acquisition in the UK. UK-based Brunner Mond group and US-based General Chemical Industrial Products were back to back bought by Tata Chemicals.

Year 2006. Another US based beverages firm Eight O’ Clock Coffee was bought for US$220 million. Tata also successfully established itself in the tea markets of other small countries like Czech Republic, where it owns JEMČA which is the biggest selling tea brand in the country.

In a move to secure resources around the world, Indian companies are actively spreading their arms. A study by Ernst and Young reports that the Indian companies have advanced in recent years and have invested appreciably in securing mineral resources. For the first time, in the year 2010, India-based companies scored over Chinese counterparts in the acquisition of foreign mineral assets. To support the statement, Indian companies had invested US$4.64 billion in 2010 to acquire businesses outside India, while Chinese overseas investments declined by more than half to US$4.45 billion.

Year 2007. Tata, just after one year of making its dominating presence in the tea markets of US and UK, moved on to the next big thing, Steel! In the year 2007, ambitious Tata Steels bought a company five times bigger than itself for US$12.1 billion. At that time Corus was ranked eighth largest in the world. This pushed Tata Steel from 65th position in the world steel production to a comfortable 5th position. In an another move in the metallurgy industry by another Indian company, Aditya Birla Group acquired Canadian Novelis, an aluminum producing company, for around $6 billion by its flagship company Hindalco Industries. This acquisition has made Hindalco world’s leading aluminium rolled products producer.

Year 2008. India made notable acquisitions in the sector in which it is considered the world leader, IT sector. Indian company HCL acquired UK based enterprise solution provider Axon in mid 2008. Overall Axon group and its subsidiaries has constituted 14% of HCL Tech’s revenue of Rs 16,030 crore and net profit of Rs 1,646.5 crore proving impressively beneficial. HCL, Infosys, and Tata Consultancy Services have till date acquired large number of companies or established their centres around the world and maintain world dominance when it comes to IT.

In the same year, in one of the most surprising deal Tata Motor’s acquired prestigious British Jaguar and Land Rover auto brands. Still very few are aware that Tata Motors owns these super luxurious British automobile brands since 2008. Tata never renamed it as Tata Jaguar. Buying from the cash strapped Ford, Tata has now recorded massive net profit in JLR section.

Jaguar Land Rover Profit

Year 2009. When most of the Indian private companies were surprising the world with one after the other big acquisitions, state run Oil and Natural Gas Corporation (ONGC) also expanded its arm, and this time again it was UK! In January 2009, ONGC bought U.K. firm Imperial Energy for $2.1 billion. It was one of the biggest foreign acquisitions by ONGC Videsh (OVL), which is the overseas arm of ONGC. OVL successfully holds stakes in various parts of the world, notably the Gulf, Latin american and Siberia.

Year 2010. In mid 2010, In one of the largest coal mines deals by an Indian group, Adani Enterprises, in a cash and royalty deal, acquired the Australian coal assets of Linc Energy for US$2.7 billion.

In the same year, Bharati Airtel, India’s largest telco also became world’s fifth largest telecom company after acquiring African assets of Kuwait’s Mobile Telecommunications Co., Zain. Apart from its massive Indian subscribers, this deal provided Bharati Airtel additional 180 million customers in 18 countries and annual revenue of $12.4 billion

Flowing in the spirit, Sahara India Pariwar in late 2010 controversially bought iconic Grosvenor House hotel in London for 470 million pounds (around Rs 3,250 crore), which gave it a considerable stronghold in the global hospitality business. Sahara India Pariwar had been losing businesses in India, Sahara airways, one of them. Sahara is also known for sponsoring various Indian and Bangladeshi sports team.

Talking about sports, Venky, flagship company of Venkateshwara Hatcheries Group bought Blackburn Rovers, 135-year old English premier division football club which however could not keep club’s fans happy.

Pedro Moreno de los Ríos, partner at Parangon Partners explains “One of the great advantages of Indian executives, compared with their Chinese counterparts, is their knowledge of Anglo-American culture. Another advantage is the greater openness that India has enjoyed when it comes to foreign capital”. He further added, “Indian managers tend to have an international approach, and “India is [even] exporting managers to China.”

Peter Cappelli, George W. Taylor Professor of Management at The Wharton School and Director of Wharton’s Center for Human Resources says, “They [Indian Companies] are aware that there are markets that have not been exploited, and they want to take advantage of them, but not if foreigners get one hundred percent of the profits,” explains Peters. He further adds, “That way, they guarantee that India will not be sold off to foreigners.” He says India and Indian companies are giving more important to their development and are open to foreign companies to gain expertise, technology and funding while maintaining control. “India wants to create its own companies and brands, while China leaves the road wide open to foreign companies,” says Peters.

India, which is third largest economy in terms of GDP (PPP) knows that it needs a stable economy if it is dreaming of becoming a super power in every manner. A strong economy, jobs, education, food security and political stability will help India excel in the path which it has already chosen. A number of foreign acquisitions like these have helped Indian companies gain expertise, technology and management lessons which will help this country shape even more global brands in the future. Companies like Tata, Birla, Reliance and Jaypee are also determined to structure better education in India through their state of the art institutions of technology. Foreign acquisition did bring some jobs to India and more importantly India has secured and has been securing some of the key resources field around the world, that will keep feeding its giant economy in a long run.

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Sanskar Shrivastava is the founder of international students' journal, The World Reporter. Passionate about dynamic occurrence in geopolitics, Sanskar has been studying and analyzing geopolitcal events from early life. At present, Sanskar is a student at the Russian Centre of Science and Culture and will be moving to Duke University.

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How To Make Business Life So Much More Favourable

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If you have a business or you’re heavily considering starting a business, then you’ll know all about the perils and the difficulties that will come with it all. While it seems like such a wonderful idea from the outside looking in, it’s actually something that can really take its toll on you if you’re not prepared enough both mentally and physically. 

You’ll always be looking for ways to make business life an awful lot more convenient. The idea in this game is obviously to work hard as you never get anywhere without a serious commitment. You’ll really want to focus on working smart, however. Hard work for no reason is foolish when you have much better ideas and techniques staring you in the face. Business life can be a real hassle if you get things wrong and have to go through laborious days. Here are just a few ways to make your days, weeks, and months a lot more favorable for you: 

Get The Right People Around You  

Who you share your time with in business matters so much. If you have all of the wrong people, then you could be on a downward slant over the next few years. If you have good people with the right attitude and intentions, then you’ll likely become a lot more successful. In terms of using the right people, we’re talking about networking, hiring staff, bringing in specialists, soliciting advice, and so many other areas. Business is an interpersonal game, so make sure the right groups and individuals work with what you’re trying to achieve. 

Embrace Technology A Lot More Than Perhaps You Are Right Now 

If you’re already someone who wants to milk every platform they have, then this idea won’t worry you too much. There are so many pieces of ai powered software around that will help you with what you’re trying to achieve. Analytics, ads, management, and so many other areas can be bolstered with good programs. 

Set Up Genuine Plans With Achievable Goals 

This sort of goes without saying because you’ll likely have plans for the tasks ahead. This is more the idea of creating more structured plans for areas that are perhaps freer and less structured. Setting goals for everything you do can lead you to understand more about what needs to be done. It also gets everyone even more motivated. 

Take Care Of The People Working With You 

In terms of those you’re with, you’re going to need to treat them properly. It’s amazing what can happen if you neglect how they feel and the work they put in. The best leaders will always hone in on each individual and check in with them. 

Outsource Certain Jobs That Are Tedious

Sometimes, there are particular tasks that – although they need to be done – take up lots of unnecessary time and stress. If you are outsourcing admin, for instance, it makes life a lot easier for you as you all can focus on the productive and progressive side. 

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Current Trends in Business That Every Entrepreneur Should Work Towards Achieving

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The world of business is changing and with it the trends that entrepreneurs should be working towards. Entrepreneurship has become a lifestyle as opposed to just a paycheck. With an entrepreneurial mindset, you can do anything. Check out these current trends in business that every entrepreneur should work on achieving:

E-Commerce

E-commerce has been a significant trend for the past few years, and you can expect it to continue being so. E-commerce has multiple benefits, including increased revenue, high availability of products, and a more significant customer base.

E-commerce allows businesses to be present on all digital platforms, which helps them reach out to more customers quickly. In addition, it makes it easier for companies to reduce overhead expenses as there are no physical stores that have rent costs associated with them or inventory levels that need maintenance constantly. Statistically, e-commerce has grown rapidly in the past few years from 25% – 30% year on year.

Financial Apps and Software

The software aspect comes into play when considering how businesses manage their finances moving forward. Companies must adapt to technology. Otherwise, they will find themselves left behind by competitors who embrace emerging technologies such as cloud computing and mobile apps. It is also easier to make purchases using these apps and communicate with the sellers. Incorporating such software with equipment and partnerships with a payment processing company will diversify the business activities and set you up for expansion.

These apps allow them to move away from traditional forms of financial management such as spreadsheets and accounting software to financial management apps such as Xero. With these new apps comes the ability to monitor business finances from anywhere, which can help businesses grow faster than what they would ordinarily be able to manage with slower conventional processes.

Blockchain Tech

Blockchain tech is the current trend in business that every entrepreneur should work towards achieving. You can apply this technology to many different industries, and entrepreneurs need to find their niche within this growing market. It’s also critically important not to overlook blockchain tech when deciding which cryptocurrency or token you want your company associated with.

Both positive and negative factors are involved in choosing one solution over another, but it all comes down to finding what works best for each situation. For example, today’s most valuable aspect of blockchain tech is its promotion of secure transactions between parties while eliminating third-party transaction fees (or at least significantly reducing them).

It means that businesses operating on a global scale could potentially enjoy significant savings in maintaining financial records. Transparency is also an important selling point for blockchain tech. The decentralized nature of its design makes all transactions public and easily accessible by anyone who has access.

Fraud and Cyber Crime

Another current trend that every entrepreneur should work towards achieving is fraud and cybercrime. In today’s modern world, the internet has brought the business community closer together as it allows you to reach a global market from almost anywhere with an Internet connection. Unfortunately, this means those who want to take advantage of this have access to millions of more potential customers, making it easier for fraudsters to steal money from unsuspecting victims.

Businesses that are not careful can fall victim to several types of cybercrime, including phishing, spoofing, pharming, and identity theft. These crimes are increasing at an alarming rate as more people use the internet for business purposes which means scammers often target them.

Conclusion

Today, business is becoming increasingly challenging. The traditional ways of doing things don’t work anymore, and it’s time for entrepreneurs to adapt to stay relevant within the industry. However, the industry itself is evolving rapidly, and it’s challenging to keep up with the changes that are happening every day. Fortunately for you, this post is here to help you understand the current trends that every entrepreneur should work towards achieving.

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Employee Training and Development Becomes One of the Most Disruptive Megatrends That Is Shaping the Future of Work

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Employee training

There is no question about the effectiveness of employee training and development. It’s incredibly important to help your staff advance their skills and knowledge to help grow a business, but the impact of employee learning has often been understated and even neglected. However, companies are now suggesting that employee training and development is one of the biggest megatrends that have completely transformed the future of work. It has overhauled how businesses should be developing and engaging with employees, and it’s leading to an incredibly diverse and talented workforce that is capable of wonderful new things.

Part of the problem of employee training and development is that it’s difficult to measure its impact on the workplace. Employee performance often isn’t a quantitative measurement that is easy to read and link to their output. This is one of the reasons why the effectiveness of employee training and development has been questioned by management experts.

Thankfully, new strategies have been developed to help measure workplace learning and its impact on companies. Below, we’ve included a helpful infographic that covers some of the most important measurements, such as return on investment and how it is calculated in the context of employee learning and development. It should put the effectiveness of employee training into perspective and will help you better understand when training is needed and how development actually improves your business and its productivity.


Infographic by: Ezra Coaching
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