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7/28/2019 MNC Industry
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Presented ByChandan Agarwal-03Anuja Bambulkar-05
Yash Chavda-08Sumeet Chhaparia-10
Pranav Dave-11Kayur Desai-13Girish Mistry-33Rohit Singh-43
Laxmi Sharma-48Sree Kumar-52
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INDIAN
India Inc. are flying
high.and not only over the
Indian sky..
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WHATISMNC ???
When a company operating in a
home nation establishes its
subsidiary in other nations (hos
nations), it becomes an MNCand there starts the process of
globalization wherein a local
company serves the entire world
with its products and services.
The advent of Internet and the
ensuing "new economy" has
opened up a plethora of new
business opportunities - and an
"inevitable" number of busines
casualties.
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WHATIS INDIAN
MNC ? Thus if an Indian Company operating within
the country establishes its subsidiaries inforeign soil, then it becomes an IndianMNC.
The age of Indian MNC has finally dawned.Mr. Aditya Birla of Aditya Birla group first
looked beyond India 30 years ago. Indiancompanies are using all the tricks of the trade
to go global: Mergers & Acquisitions, Organicexpansions, Green field investments, and
Joint Ventures. The scale and the businessshare may not be significant today, but Indian
businesses are slowly but surely establishing
themselves abroad.
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REALITY BYTES:
According to the latest UNCTADs World Investment
Report 2007 (WIR 07), Indias outward FDI was the
second highest at US$ 20.4 billion after Brazil at US$ 28
billion.
Grant Thornton a global consultancy firm stated that
India Inc had 92 merger and acquisition deals, valued at
nearly US$ 6 billion, in the first two months of 2008.
In 2007, India Inc spent US$ 33 billion on overseas
mergers and acquisitions (M&As), compared to the US$
15 billion spent by foreign firms for acquisitions in India.
Tata Motors takeover of Jaguar and Land Rover (JLR)for US$ 2-2.5 billion is an excellent example set by an
INDIAN MNC towards this glory.
Consequent to this surging FDI outflows, there has
been an increase in the overseas earnings (in terms of
dividend, royalty, license and technical fee and other
inward remittances) of Indian companies.
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Indian outbound deals, which were
valued at US$ 0.7billion in 2000-01,
increased to US$ 4.3 billion in 2005, andfurther crossed US$ 15 billion-mark in
2006.
In fact, 2006 will be remembered inIndias corporate history as a year when
Indian companies covered a lot of new
ground. They went shopping across the
globe and acquired a number ofstrategically significant companies. This
comprised 60 per cent of the total
mergers and acquisitions (M&A) activity
in India in 2006. And almost 99 per centof acquisitions were made with cash
payments.
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INDIAN MNCs OUTBOUNDDEAL Since 2000
raphical representation of Indian outbound deals since 200
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The economic crisis of 1991, which
dragged us to a near-default
situation in its interest payments isnow well established as a watershed
year in the history of our nation and
marks the leap from an inward
looking closed economy to a moreopen, globalized one.
Data from finance advisors reveals
that in 2002, 28 foreign companies
got acquired by Indian companies.The figure climbed to 49 in 2003, 60
in 2004 and 100 in 2005. In value
terms, the acquisitions were valued
at US$209million in 2002, US$1.8billion in 2003, US$1.79 billion in
2004 and US$2.3 billion in 2005.
7/28/2019 MNC Industry
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The result was a surge inacquisitions by Indian companies as
shown above
7/28/2019 MNC Industry
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Sector wise trend of Indiancompanies global acquisitions are
shown above
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GrowthOfIndianMNC
Corporate India is on
a rollIndian outbounddeals, or global
mergers andacquisitions, valued
at
$ 15 bn mark in 2006.And in 2007, it hascrossed the $33 bn
mark .
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The cornerstone of a recently
released Boston Consulting Group(BCG) studysifted through more
than 3,000 companies with an
annual $1 billion turnover for 2004-
06 - confirms that the next wave ofinternational corporate success will
come from a host of Indian
companies with low-cost, high-quality products and services.
Ten Indian companies are listed onthe NYSE and Four on NASDAQ.
There are over 15 companies listed
on the London Stock Exchange.
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IndianAcquisitionInEU
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$1.59 $1.61
$3.50
$2.98
$0.00
$0.50
$1.00
$1.50
$2.00$2.50
$3.00
$3.50
$4.00
2003 2004 2005 2006
Value of Global Acquisitions by Indian
Companies:2003-2006(till April 2006)
INDIA AND EUROPEAN
UNION
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dian Acquisitions In EUdian Acquisitions In EU
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IndianAcquisitionsInUK.
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Indian MNC on the global platform
ON THE NEW YORK STOCK
EXCHANGE
Sl.
No.
COMPANY SECTOR
1 DR REDDYS LABS LTD PHARMACEUTICALS
2 HDFC BANK LTD BANKING
3 ICICI BANK LTD BANKING4
MAHANAGAR TELEPHONE
NIGAM LTDTELECOMMUNIC
ATIONS5
PATNI COMPUTER SYSTEMSLTD
IT SERVICES6
SATYAM COMPUTERSERVICES LTD
IT SERVICES7 TATA MOTORS LTD AUTOMOBILES8
VIDESH SANCHAR NIGAMLTD
TELECOMMUNICATIONS
9 WIPRO LTD IT SERVICES
10 WNS BPO
INDIAN FIRMS LISTED ON
THE NASDAQ
Sl.No.
COMPANY SECTOR
1INFOSYS
TECHNOLOGIES LTD IT SERVICES2 REDIFF.COM INDIA LTDINTERNET
PORTAL
3 SIFY LTD IT SERVICES4 EXL BPO
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TopIndianMNCs
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The Group is one of India's
largest and most respectedbusiness conglomerates,
with revenues in 2006-07 of
$28.9 billion. The current
chairman of the Tata group
is Ratan Tata, who took over
fromJ. R. D. Tata in 1991.
It has interests in steel,
automobiles, information
technology, communication,power, tea and hotels.
Initiator
TATA GROUP
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oftware Powerhouse
Infosys
Technologies
It is Indias second-
biggest software company
and a major IT consulting
firm thatgenerates60%
of its sales in the U.S.
Market.
The Bangalore-based company is
expanding quickly into Europeto
customize software applications
and manage computer networks. I
is facing increasing competition
from IBM and Accenture for
quality engineering talent at
home. Even so, its an earningshigh-achiever: Third-quarter
profits shot up 50%.
One-Year Total Return:64.8%
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Acquisition Machine
WIPRO
Indias third-biggest software
company and IT consulting firm
is on an earnings tear, with
fourth-quarter profits up 40%
to $169 million.Last year,
Wipro spent more than $250
million on acquisitions athome and in foreign markets
such as Sweden and Finland,
and the companys billionaire
chairman, Azim Premji, says he
wants to do bigger deals in theyears ahead to boost economies
of scale and to lower costs.
One-Year Total Return: 26.26%
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This high-flying drug company,
Indias third largest, reported a
tripling of net income to $42.5
million in the fourth quarter
and specializes in selling and
exporting versions ofblockbuster drugs developed by
other companies such as Bayer
and Merck at much lower
prices. Its generic business in
the U.S., the worlds biggest
pharmaceutical market, issizable, and some 86% of its
global sales come from outside
India
One-Year Total Return: 25%
ndia Pharma
Dr. Reddys Laboratories
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Wireless Wonder
Bharti
t is good to be Indias biggest
wireless operatordoing
usiness in the worlds fastest-
rowing market for mobilehones. Now, Bharti is looking
o expand in other fast-
rowing emerging markets
uch as Africa. Britains
odafone owns a 10% stake in
harti, which also providesutsourcing services to IBM.
One-Year Total Return: 107%
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The TataNano, theworlds
cheapestproductioncar.
The HCLlaptop, thecheapestproductionlaptop.
TheInfosys ITtrainin
gcampus thelargestin theworld
KingfisherAirways, votedthe bestairline ofsouth-eastAsia.
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Challenges of Going Global
from India
Overcoming Liabilities
of Origin
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The first challenge is to develop a global
corporate mindset
The second challenge is to make your
people understand and respect local habits,
cultures, etc.
The third challenge relates to establishing
brand equity overseas.
The fourth challenge is that of
developing a global pool of managerial
talent.
Finally, there is a fifth set of challenges.
These involve making one's globalised
character successful and sustainable.
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LOOKING AHEAD----
FUTURE PLAN OFINDIAN MNCs
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A majority of all Indian outbounddeals and investments were done to
consolidate and integrate their
investment and business structuresof the companies acquired. More
overseas investments by leading
Indian firms are in the pipeline in a
bid to expand their business andstrengthen their global presence.
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ADA Group company Reliance
Communications (RCom) plans to setup WiMax networks across 50
countries in the next three years to
move into the global
telecommunication market.
Infosys plans to acquire Phillips
Global for $200 million.
Reliance Communications (RCom)
the Indian telecom major will invest
up to US$ 500 million in establishingan internet Protocol-enabled
integrated telecom network in
Uganda.
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India plans to set up a multi billion
dollar sovereign wealth fund to investn energy assets overseas.
Tata Communications plans to invest
more than US$ 2 billion over the next
hree years to fuel its global expansion
plans.
Indian preventive healthcare and
beauty-care brand VLCC has
nnounced rolling out of a US $ 54.5million expansion across the MiddleEast.
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WHAT DO THE
LEADERS
SAY???
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We have just begun.If we stay in India, we will be at acompetitive disadvantage
RATAN TATA
We have 40 patents, 60 percent ofour income comes from the UnitedStates. We have now expanded intoCanada.
AZIM PREMJI
The scale of operation isextremely important for thealuminum sector. Global growth isa must.
KUMARMANGALAM BIRLA
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CURRENT SCENARIO
FOR THE FISCAL 2007-2008 AND
Q1 FOR THE YEAR 2008-2009
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M&A by Indian Multinationals at
Foreign Turf valued at US$11.37
billion
Tata, Essar, Reliance and Infosys wereamong the biggest acquirers in the US.
Tata Group remained at the forefront with
their total deal values worth $2.13 billion insteel, hospitality and automotives sector,
revealed the Chamber Study.
Aditya Birla announced take over ofUtkal Alumina International for $0.19
billion.
India Inc acquired companies abroad
valued at $11.37 billion while theforeign firms invested much less $2.06
in buying out the Indian firms in the
first quarter of fiscal 07-08, according
to ASSOCHAM Eco Pulse Study (AEP)
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North America and Asia werethe favorite hunting
grounds of India Inc onglobal acquisition chase as
the takeovers deals inthese region touched
whopping $7 billion and
$4.2 billion within the firstfour months of financialyear 2007-08, according toASSOCHAM Eco Pulse
Study (AEP).Among the Asiancountries, Vietnam wasthe largest receiver of
the deal money as TataSteel entered into ajoint venture with
Vietnam Steel with 65per cent stake for $3.5
billion
The Indiancompanies madetheir presence felt inItaly and Spain with$97 million and $19
million takeoverdeals.
South American and Africanregion remained low on the
acquisition radar with $6 millionand $5 million deals completed
during the period notedAssocham study.
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CONCLUSION
Let the world buy in, letsbuy out is the latest buzzin boardrooms across the
countryThe rules of the game are
changing, and changingvery fast. Its almost like
Kerry Packers nightcricket, which had few
believers at first but laterbecame the mantra for
global cricket.
ndian companies are readyto play in the night andmake the years to come
bright with mega dealsand plenty of global
brands.
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