In one of the India Rising documentaries, narrated by the top Indian Mega Star Amitabh Bachhan , a line goes as follows:
This is An India that no longer boycotts the foreign made goods, but instead buys out the companies that make them !
Yes, the Indian companies are on a shopping spree across the globe, buying out and acquiring foreign companies left and right.
In the first 8 months of 2004 itself Indian companies acquired over 60 foreign companies!
But that was just the beginning.
What started with a mere US$ 0.7 billion in 2001, the outbound shopping rose to a whopping 15 billion USD in 2006, of which 99% were outright cash payments.
But 2007 is breaking all the past records. Just between January and May of 2007 India Inc shopped abroad and purchased 102 companies outside India worth over 28 billion USD! This amounted to about 60% of total Mergers and Acquisitions by Indian companies in this period! The total number of M&A between this period by India Inc was 287 worth over 47 billion USD! The total estimate for 2007 is that India Inc will acquire about 180 companies abroad, most of them from US and Europe.
Another interesting figure is, just the Top 10 acquisitions by the Indian companies are more than double the entire similar acquisitions by US companies of their Indian counterparts!!
And this is not limited to software or IT only. In fact there is no IT company in the top 10 acquisitions by India Inc! Indian companies have been acquiring on a variety of sectors including pharmaceuticals, IT, energy, metals, automotive components, beverages, cosmetics, mobile communications, financial services etc.
The top acquisitions by Indian companies so far are:
- Corus Group plc of UK acquired by Tata Steel for 12 billion USD (Steel)
- Novelis of Canada acquired by Hindalco for 6 billion USD (Steel)
- Daewoo Electronics Corp. of South Korea acquired by Videocon for 729 million USD (Electronics)
- Betapharm of Germany acquired by Dr. Reddy’s Labs for 597 million USD (Pharmaceutical)
- Hansen Group of Belgium acquired by Suzlon Energy for 565 million USD (Energy)
- Kenya Petroleum Refinery Ltd. of Kenya acquired by HPCL for 500 million USD (Oil and Gas)
- Terapia SA of Romania acquired by Ranbaxy Labs for 324 million USD (Pharmaceutical)
- Natsteel of Singapore acquired by Tata Steel for 293 million USD (Steel)
- Thomson SA of France acquired by Videocon for 290 million USD (Electronics)
- Teleglobe of Canada acquired by VSNL for 239 million USD (Telecom)
The entire purchase projection by India Inc in the year 2007 is about 50 billion USD and what’s more? This number is expected to touch 100 billion USD in 2008!!
Of the Top 50 Asian companies in the Forbes list 7 are from China, and India tops the list with 12! These 12 Indian companies are
- Bharat Heavy Electricals
- Bharti Airtel
- Grasim Industries
- HDFC Bank
- ICICI Bank
- Infosys Technologies
- Larsen & Toubro
- Reliance Industries
- Satyam Computer Services
- Tata Consultancy Services
- Tata Steel
Most of the above listed companies did not have to leave home to find success, India with a whopping market size of 1.1 billion is more than enough for any big company to make it to the top :)
Indian Oil Corporation, Reliance Industries Limited, Bharat Petroleum, HPCL, ONGC and State Bank of India are already on the global Fortune 500 List! Tata Steel is expected to join this list soon.
In other words, the Multi National Companies of the world in the future will be predominantly from India.
Watch the video below narrated by Amitabh Bacchhan in his majestic voice