THE MADE-IN-INDIA MNCs

RISING CONFIDENCE, ACCESS TO CAPITAL, AND EXECUTION MUSCLE HAVE BIRTHED A HUNGRY INDIA INC. BUT GLOBAL HEADWINDS AND MUTED DEMAND WILL TEST THE RESILIENCE OF INDIAN GROUPS MAKING A GLOBAL SPLASH

- BY KRISHNA GOPALAN

IN THE SUMMER of 2000, Tata Tea acquired UK’s Tetley Tea for $450 million. Nothing spectacular, you might imagine. But it bordered on sheer audacity. After all, the buyer had a net worth of just $114 million and was gobbling a much bigger company, with a revenue of $264 million. Tata Tea saw a strategic rationale for the leveraged buyout (using debt to acquire a company and leveraging the acquired company’s assets as collateral). It gave Tata Tea access to international markets with significant play and scale.

Soon, going global became a stated ambition for Indian corporates. In the past, barring a few exceptions, domestic business houses had an overseas presence through exports or small offices. But the Tetley deal marked the coming of age of India Inc. and start of a phase that saw Indian companies go on a shopping spree across the world.

Over time, that presence would cut across sectors. Be it automobiles, information technology and enabled services (IT/ITeS), telecommunications, fast-moving consumer goods, metals, textiles, hotels, pharmaceuticals, or pretty much anything else, the global map is now dotted with the ubiquitous Indian flag. This July, Tata Motors bought Iveco, an Italian commercial vehicle manufacturer, for $4.4 billion. This made it the Indian automaker’s largest acquisition ever and topped the $2.3 billion purchase of Jaguar and Land Rover (JLR) in 2008.

While there are enough reasons to be happy, the path to 2047 will be very different. Geopolitical tensions, technology invasion, and a disruption of the world order are some of the issues that Indian companies will have to contend with as they fulfill their global ambitions.