Home is where the Moolah is !!!

- Mihir Kulkarni (TE ETRX)

“If you desire something with all your heart, the entire universe conspires to help you get it”

If one wishes to believe this line, then India Inc. (Indian companies) is on its way to conquer the world. This booming economy, is poised to reign the global market. Just weeks after Tata Steel acquires Corus, there are a couple of acquisitions announced by India Inc such as acquisition of Novelis by Hindalco. By the time you read this, there will be some more acquisitions. Such acquisitions not only reflect the confidence, but also justify the fact that India Inc is emerging as a significant and a recognised global player. The ‘internationalisation' of the Indian corporate sector has reached a new high. The global perception about Indian companies, their creditworthiness and their potential has been recognized and acknowledged.

What sets us apart?

The slowing down of US economy is considered as a threat to global economy. But our population, which is otherwise considered as a dampening factor, has played a significant role in making India Inc a super-hero! This population has a huge appetite for consumption of products. This explains the ‘domestic consumption story’ that is driving the growth. In order to satisfy the demand, corporates expand rapidly and seek the inorganic route (growing by acquisitions).Thus, practically India remains least affected by other economies, due to high domestic demand.

The ‘India story’:

If you are still not convinced, here is a fact about the “Brain-Drain” story that once was. In IIT-Bombay, 95% of the students got placed in India last year. In IIT-Kanpur, of 270 BTech grads, 3 went abroad.Only one of the 34 holding a dual degree chose to wing overseas. In IIT- Madras, only two students from the BTech batch went out to join Lehman Brothers in Tokyo. All IIT-Guwahati grads were placed in India. So, India is being looked upon as a destination by the professionals as well as the corporates. "India Inc. as a brand has become very visible," says Pavan Kumar Maddali, a vice president at Hyderabad, India-based Satyam Computer Services Ltd. "No vendor needs to have a 'Why India?' slide in their PowerPoint presentations any longer."

The steep rise in the Sensex indicates, to a certain extent, that Indian companies are performing better than expected. FIIs invested USD 10.701 billion in the Indian equity market in 2005 and about USD 8 billion in 2006. Also, the total number of FIIs operating in India crossed the 1,000 mark for the first time, according to the data released by SEBI (Securities and Exchange Board of India.).

In addition to this, top global companies are investing heavily in India to get a piece of the cake. For instance, IBM corp. decided to triple its investment in India to $6 billion over the next three years. The recent Mahindra & Mahindra -Renault-Nissan joint venture to produce cars at a new plant near Chennai, at an investment of Rs 4,000 crore, is an example of the growth India has to offer. It signifies the fast development and reflects the future of India.

So, who is spoiling the party?

Unfortunately the Indian investor is more skeptical about the potential of Indian companies as compared to the foreigners When the entire world is gung-ho about the India story, the Indian stock markets seems to be developing cold feet. The Tata Steel stock fell almost by 10% when it announced the acquisition and same was the case with the Hindalco stock. The problem lies with all of us, who don’t have faith in the India-story and are extremely cynical about the mesmerizing corporate growth rate. The market is not prepared to accept the fact that Indian corporations can absorb the huge debts they are creating to acquire companies larger than their own size.

What could be done?

All of us have got used to perceiving defeat or a problem as something ‘meant to be’! Very conveniently we have learnt to blame it on the menaces of poverty, illiteracy and corruption. Many a times the government becomes the scapegoat in this blame-game; while we fail to realise that all these problems root back to the society. Society , which is nothing but ‘us’! Then why this hypocritical attitude? We should realize that ‘no country is perfect, it needs to be made perfect’. And what could be a better actuation point than ourselves ! We can make a difference; it’s just a matter of accepting responsibility, believing in our potential, instilling an optimistic and constructive view and stepping ahead! ...and India story starts making sense. India poised to become a superpower, does not sound exaggerated any more. The economic growth seems promising and intriguing. The whole world looks upon us and most importantly, we start believing in ourselves!