Indian biz. going Abroad


We define current era as a machine-age; everything that exist need to be fast or doesn’t exist. This peculiarly is true for business and commerce.

Companies need to adopt a Revolutionary Policies than Evolutionary. This has being witnessed with the Indian Business world. The pace at which Indian Companies have been progressing is marvelous.

Indian Business, prior were very contained for growing within the boundaries. In-house acquisitions and mergers were always in effect. But the present performance and tempo of Indian business worth a millions of appreciation.

This is no abrupt appraisal or a miracle. Indeed, Indian brains have always been admired through-out the Globe. Role of Indians in IT, Finance, and now in BPO outsourcing. These are at operational and managerial / commercial range. The same can be witnessed in Science; talk about no. of people working at NASA & many such organization, as well the recent shifts of R&D centre for Automobiles, IT, Pharmaceuticals, Aviation & Space etc. These are large in numbers to speak about.

The number of Indian takeovers abroad has increased dramatically from 2005 to 2006 and 2007, just started has the scenario even a better off.

Estimated takeover in 2005 were about 137, aggregating to USD 4.5 billion. Whereas, in 2006, according to Dealogic, this numbers have increased by 417% and suggest to remain more intense & impressive for 2007.

Conglomerate takeover figures in 2006 is accounted to USD 23.126 billion. Of which, more then half is accredited in one single deal, i.e. Tata’s acquisition of Anglo-Dutch steel maker Corus Group. This deal closed at USD 13.7 billion. Now with Corus under Tata Group, Tata steel reached to 5th largest steel company, from earlier 56th.

And to add, this is the largest cross-continent acquisition by any Asian company.

The 2nd quarter of 2007 is just about to end, and so-far Indian backed acquisition state for USD 11.878 billion, 41 purchases still under evaluation. And recent deals are yet to be updated, such as Sun Pharma taking over Israeli company, Taro Pharma, TCS’ acquisition, and many other tiny hands.

Another two largest bid under progress are for Merck’s Pharma division and Dow’s Polymer. And mind you, do note Merck and Dow are among the biggest companies in the world.

Another interesting point to learn is foreign acquisitions are not just the monopoly of big Indian Companies / MNC. Recent decision of RBI allow Indian Banker to avail funded as well as non-funded credit for foreign takeovers where Indian companies have min. of 51 % stake in the foreign subsidiary. Further resolution of RBI have enhanced funded / non-funded credit limit for Banks to India JVs from 10 – 20 % of their unimpaired capital funds.

Although, still the role of Indian Banks in funding acquisition is not impressive, but good sign is at least they have taken a step forward. Major of today’s takeover is financed by the foreign Banks.

However, if Indian Banks are empowered, liberally to support such deals then many Indian Small and Medium Enterprises will seek opportunity to grow abroad.

The scenario is more or less similar to other Asian countries as well, esp. China, Taiwan and Hong Kong.

Indian Economy is growing at a rapid pace. Although there are many other issues at the micro-level that need a large attention and desperate attempt to resolve them. Economic policies and control measures are direly needed to look after social security and social status improvement. It is certain that it will be a long way around to filter the benefits from growing economy to every individual and at every level.

[Jay Joshi]

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