India Inc. are flying high.…and not only over the Indian

sky……..

WHAT IS MNC ???

When a company operating in a

home nation establishes its subsidiary in other nations (host nations), it becomes an MNC and 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 business casualties.

WHAT IS INDIAN MNC ?

• Thus if an Indian Company operating within the country establishes its subsidiaries in foreign soil, then it becomes an Indian MNC.

• The age of Indian MNC has finally dawned. Mr. Aditya Birla of Aditya Birla group first looked beyond India 30 years ago. Indian companies are using all the tricks of the trade to go global: Mergers & Acquisitions, Organic expansions, Green field investments, and Joint Ventures. The scale and the business share may not be significant today, but Indian businesses are slowly but surely establishing themselves abroad.

REALITY BYTES:•According to the latest UNCTAD’s World Investment Report 2007 (WIR ’07), India’s 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.

Indian outbound deals, which were valued at US$ 0.7 billion in 2000-01, increased to US$ 4.3 billion in 2005, and further crossed US$

15 billion-mark in 2006.

In fact, 2006 will be remembered in India’s corporate history as a year when Indian companies covered a lot of new ground.

They went shopping across the globe and acquired a number of strategically significant

companies. This comprised 60 per cent of the total mergers and acquisitions (M&A)

activity in India in 2006. And almost 99 per cent of acquisitions were made with cash

payments.

INDIAN MNCs OUTBOUND DEAL Since 2000

Graphical representation of Indian outbound deals since 2000

• The economic crisis of 1991, which dragged us to a near-default situation in its interest payments is now well established as a watershed year in the history of our nation and marks the leap from an inward looking closed economy to a more open, 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$209 million in 2002, US$1.8 billion in 2003, US$1.79 billion in 2004 and US$2.3 billion in 2005. 

Source: www.ibef.org

The result was a surge in acquisitions by Indian companies as shown above

Source: www.ibef.org

Sector wise trend of Indian companies’ global acquisitions are shown above

Growth Of Indian MNC

“Corporate India is on a roll” Indian outbound deals, or

global mergers and acquisitions, valued at

$ 15 bn mark in 2006. And in 2007, it has crossed the $33

bn mark .

•The cornerstone of a recently released Boston Consulting Group (BCG) study – sifted through more than 3,000 companies with an annual $1 billion turnover for 2004-06 - confirms that the next wave of international corporate success will come from a host of Indian companies with low-cost, high-quality products and services.

• Ten Indian companies are listed on the NYSE and Four on NASDAQ. There are over 15 companies listed on the London Stock Exchange.

Investment by Indian MNCs - Region wise

$0.000

$1.000

$2.000

$3.000

$4.000

$5.000

United S tates ofA meric a

A s ia P ac ific E urope

In B illion

$4.58

$3.8 $2.89

Indian Acquisitions In EU

$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

Indian Acquisitions In EUIndian Acquisitions In EU

Indian Acquisitions In UK.

Indian MNC on the global platform

ON THE NEW YORK STOCK EXCHANGE

Sl. No. COMPANY SECTOR

1 DR REDDY’S LABS LTD PHARMACEUTICALS

2 HDFC BANK LTD BANKING

3 ICICI BANK LTD BANKING

4 MAHANAGAR TELEPHONE NIGAM LTD TELECOMMUNICATIONS

5 PATNI COMPUTER SYSTEMS LTD IT SERVICES

6 SATYAM COMPUTER SERVICES LTD IT SERVICES

7 TATA MOTORS LTD AUTOMOBILES

8 VIDESH SANCHAR NIGAM LTD TELECOMMUNICATIONS

9 WIPRO LTD IT SERVICES

10 WNS BPO

INDIAN FIRMS LISTED ON THE NASDAQ

Sl. No. COMPANY SECTOR

1 INFOSYS TECHNOLOGIES LTD IT SERVICES

2 REDIFF.COM INDIA LTD INTERNET PORTAL

3 SIFY LTD IT SERVICES

4 EXL BPO

Top Indian MNCs

The Group is one of India's largest and most respected business conglomerates, with revenues in 2006-07 of $28.9 billion. The current chairman of the Tata group is Ratan Tata, who took over from J. R. D. Tata in 1991. It has interests in steel, automobiles, information technology, communication, power, tea and hotels.

Initiator TATA GROUP

Software Powerhouse Infosys Technologies

It is India’s second-biggest software company and a major IT consulting firm that generates 60% of its sales in the U.S. Market.

The Bangalore-based company is expanding quickly into Europe to customize software applications and manage computer networks. It is facing increasing competition from IBM and Accenture for quality engineering talent at home. Even so, it’s an earnings high-achiever: Third-quarter profits shot up 50%.

One-Year Total Return: 64.8%

Acquisition Machine

WIPRO

India’s 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 at home and in foreign markets such as Sweden and Finland, and the company’s billionaire chairman, Azim Premji, says he wants to do bigger deals in the years ahead to boost economies of scale and to lower costs.One-Year Total Return: 26.26%

This high-flying drug company, India’s third largest, reported a tripling of net income to $42.5 million in the fourth quarter and specializes in selling and exporting versions of blockbuster drugs developed by other companies such as Bayer and Merck at much lower prices. Its generic business in the U.S., the world’s biggest pharmaceutical market, is sizable, and some 86% of its global sales come from outside IndiaOne-Year Total Return: 25%

India Pharma Dr. Reddy’s Laboratories

Wireless Wonder

Bharti

It is good to be India’s biggest wireless operator—doing business in the world’s fastest-growing market for mobile phones. Now, Bharti is looking to expand in other fast-growing emerging markets such as Africa. Britain’s Vodafone owns a 10% stake in Bharti, which also provides outsourcing services to IBM.

One-Year Total Return: 107%

The Tata Nano, the world’s cheapest production car.

The HCL laptop, the cheapest production laptop.

The Infosys IT training campus – the largest in the world

Kingfisher Airways, voted the best airline of south-east Asia.

Challenges of Going Global from India

Overcoming Liabilities of Origin

•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.

LOOKING AHEAD----

FUTURE PLAN OF INDIAN MNCs

A majority of all Indian outbound deals and investments were done to

consolidate and integrate their investment and business structures

of the companies acquired. More overseas investments by leading

Indian firms are in the pipeline in a bid to expand their business and strengthen their global presence.

ADA Group company Reliance Communications (RCom) plans to set up 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 establishing an internet Protocol-enabled integrated telecom network in Uganda.

India plans to set up a multi billion dollar sovereign wealth fund to invest in energy assets overseas.

Tata Communications plans to invest more than US$ 2 billion over the next three years to fuel its global expansion plans.

Indian preventive healthcare and beauty-care brand VLCC has announced rolling out of a US $ 54.5 million expansion across the Middle East.

WHAT DO THE LEADERS SAY???

“We have just begun. If we stay in India, we will be at a competitive disadvantage”

RATAN TATA

“We have 40 patents, 60 percent of our income comes from the United States. We have now expanded into Canada.”

AZIM PREMJI

“The scale of operation is extremely important for the aluminum sector. Global growth is a must.”

KUMARMANGALAM BIRLA

CURRENT SCENARIO

FOR THE FISCAL 2007-2008 AND Q1 FOR THE YEAR 2008-2009

M&A by Indian Multinationals at Foreign Turf valued at US$11.37 billion

Tata, Essar, Reliance and Infosys were among the biggest acquirers in the US.

Tata Group remained at the forefront with their total deal values worth $2.13 billion in steel, hospitality and automotives sector, revealed the Chamber Study. Aditya Birla announced take over of Utkal Alumina International for $0.19 billion.India Inc acquired companies abroad valued at $11.37 billion while the foreign 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)

ACCROSS THE GLOBE

North America and Asia were the favorite hunting grounds of India Inc on global acquisition chase as the

takeovers deals in these region touched whopping $7 billion and $4.2 billion within the first four months of financial year 2007-08, according to

ASSOCHAM Eco Pulse Study (AEP).

Among the Asian countries, Vietnam was the largest

receiver of the deal money as Tata Steel entered into a joint

venture with Vietnam Steel with 65 per cent stake for $3.5 billion

The Indian companies made their presence felt in Italy and Spain with $97 million and $19 million takeover

deals.

South American and African region remained low on the acquisition radar with $6 million and $5 million deals completed during the period noted Assocham study.

CONCLUSION‘Let the world buy in, let’s buy out’ is

the latest buzz in boardrooms across the country

The rules of the game are changing, and changing very fast. It’s almost

like Kerry Packer’s night cricket, which had few believers at first but later became the mantra for global

cricket.

Indian companies are ready to play in the night and make the years to

come bright with mega deals and plenty of global brands.

Thank You

Presented By:

Amrita Bhattacharjee

Deblina Datta

Khushboo Khandelwal

Lalit Sharma

Sarfe Alam

Shaswati Pramanik