India's readiness to grasp technology has resulted in the country emerging as an economic power to be taken note of. But who are the main players in the engineering sector and how do we deal with them? E&T reads an important new book on the subject.
Who are the entrepreneurs shaping India's national and international trading success? Who is behind the founding of Infosys Technologies, the Bangalore-based IT consulting giant, Zee TV, India's first satellite channel, and Biocon India, Asia's largest biotechnology group?
'India Inc', a new book that aims to shed light on 21st century Indian business, covers a select few role models. There are doubtless a fair few more success stories responsible for the new thrust we've come to associate with India's global and internal advance. UK companies can only hope that Corus's experience in the Teesside steel plant, where 1,700 jobs are threatened, and Tata's investment in Jaguar Land Rover - both currently looking for a government bailout - will not discourage future investment in the UK.
The fact that India's domestic market is growing at an estimated 6.5 per cent this year (lower than the double-digit growth rate of recent years) is clearly a major boon - a safety net for companies like Tata facing slowdown in other parts of the world.
As far as this book is concerned, the leader of the pack is Mukesh Ambani, the older of two siblings who each took over half of the Reliance empire after the death of their father Dhirubhai. Mukesh is chairman and managing director of Reliance Industries, which extends from petrochemicals to textiles to oil and gas exploration and is the largest polyester yarn and fibre producer in the world, exporting products in excess of US$20bn to 108 countries. His brother, Anil, drives the 'new' services-led business focused on entertainment (including a tie-up with celebrated movie director Steven Spielberg), telecommunications and finance. He's the mega-ambitious brother, the one to watch.
Then there is Vijay Mallya, a larger than life personality, who took the reins of the United Breweries Group at a very young age and turned it into a globally competitive conglomerate with interests spanning alcoholic beverages, airlines, engineering and agriculture - some 60 companies which include the acquisition of Whyte & Mackay, one of the oldest Scotch whisky brands.
Indian women at work
This book's focus on the ten to watch starts with Narayana Murthy, chairman of Infosys, claimed to be one of the most enduring Indian success stories and possibly the most transparent and open company in the world and the first Indian company to be traded on Nasdaq with a market capitalisation of $15-16bn. The company's strategy, we learn, is to avoid being a subcontractor of large, consortium-style bids or merely to provide manpower for tasks. It aims to compete for large projects that utilise its breadth of skills.
Women make up 26-27 per cent of the company's 105,000 strong workforce. The chairman, who looks on himself a chief mentor, says, 'ideally I would like to take the recruitment of women to 50 per cent, and we are working towards it. We have created various initiatives that make this a more attractive workplace for women, such as providing crèches and telecommuting for women in certain stages of their family life.'
Indian companies' ready grasp of technology has contributed to the faster growth of entire industries, including, not surprisingly, banking. KV Kamath, chairman of the Industrial Credit and Investment Corporation of India (ICICI), India's largest private bank with assets of over $100bn was convinced that ICICI's competitive edge would come from the use of technology, drawing his inspiration from Silicon Valley to turn an average industrial lender into a global banking powerhouse with a market capitalisation now almost 20 times higher than in the late 1990s. 'Very simply,' he says, 'our business is to be an anchor for the economic growth of the country. What keeps me going is the challenge of India.'
Kamath is clearly keen to invite world players to India to appreciate its openings, but cautions 'when you look at India in terms of business, you are looking at an opportunity for the next 20 years and double-digit growth figures. So it has to be a long-term strategy. Also it is fundamental that you think of India as India. Don't try and work here on Western notions.'
One of the most remarkable success stories is attributed to a woman who wanted a career as a brewer, hit the glass ceiling due to her gender and at the age of 25 launched a biotechnology company in a garage, built global sales of $712bn and floated the company in 2004 becoming one of India's wealthiest female entrepreneurs. Kiran Mazumdar-Shaw applied her knowledge of brewing and fermentation to the production of medicines and gave birth to a new industry of which she is the leader. Biocon India started as a manufacturer and exporter of enzymes and became a life science driven generics company exploiting fermentation technology.
The Tata Group is best known in the UK for its interest in steel and luxury cars. One of the group's longest serving executive in charge of its IT services consultancy (TCS), India's largest software company, Subramaniam Ramadorai, started as a junior engineer in a fledgling Tata business and became responsible for propelling TCS into the big league with 170 offices across 50 countries. Almost two-thirds of Tata's profits go to worthwhile charitable causes.
Another leading Indian entrepreneur with 17 enterprises to his name, Tulsi R Tanti, faced an early choice: to manage his family's cinema halls or its cold storage facilities. Today few entrepreneurs can boast a billion-dollar enterprise built, quite literally on air. As chairman of Suzlon Energy, the world's third largest supplier of wind turbines and other complete end-to-end wind power solutions, Tulsi R Tanti is seen as one of the heroes of the environment - 'the face of wind energy in India and on his way to becoming a global market leader.' He says: 'I drive my business as a cause - one where we power a greener tomorrow.' His company already covers some 21 countries on five continents and has manufacturing bases in the USA, China, Germany and Belgium, besides India.
Yet another leading Indian entrepreneur, Shiv Nadar, is a foremost philanthropist, described by Forbes last year as one of the '48 Heroes of Philanthropy' for endowing $30m to provide affordable higher education in India and for offering $1m in scholarships each year. Shiv Nadar is the founder and chairman of HCL Technologies, India's fourth-largest IT company, employing 60,000 people across 26 countries, generating revenues of $2.6bn. The author of India Inc describes him as India's biggest opportunist. He is a major shareholder in 'a blockbuster firm that trains more IT professionals than all of India's colleges put together'.
Made in India
Hindustan Computers Limited (HCL) has become synonymous with computer hardware and software, but also IT education and technology development and is now one of the largest sellers of personal computers in India, punching way above its weight in the hardware market. In 1989 HCL America was born in Sunnyvale, California, the toughest market to crack at the time. Today this company accounts for nearly 55 per cent of HCL's worldwide consulting and IT services revenue. As the chairman says, 'nothing has ever stopped HCL from finding new marketplaces'.
Finally, meet India's Mr Manufacturing - Baba Kalyani, chairman of a $2.4bn group of which Bharat Forge Ltd (BFL) is the flagship company, supplying virtually every global OEM and Tier 1 supplier in the world, and making it one of the world's largest forgings companies. It's no mean feat, as the book's author writes, to claim that almost every car made in Europe and North America contains a Bharat Forge part. Every second truck made in the US or Europe has a BFL front axle or engine component.
'But in keeping with the turbulent times in the economy, BFL is rolling out a parallel process of diversification to shield itself from over dependence on a struggling automotive sector.' Mr Kalyani, we are told, 'was almost single-handedly responsible for establishing the 'Made in India' manufacturing brand as a global force to be reckoned with, starting with the 2003 acquisition of a German company at a time when Indian entrepreneurial presence abroad was at best obscure.' Since then further acquisitions include Swedish and Scottish companies and a joint venture in China.
'Every automotive supplier is dealing with this cyclical downturn,' says Mr Kalyani. 'Our strategy is to diversify into the non-automotive business and expand into supplying for large infrastructure projects in the field of railways, shipping and aircraft.'
India Inc holds much for the ambitious young would-be tycoon and every established business leader. These key players represent the developing present and the future of India and the rising prosperity of its people, but also the potential trading opportunities for companies prepared to take a medium- to long-term view.
'India Inc: How India's top 10 entrepreneurs are winning', by Vikas Pota is published by Nicholas Brealey, ISBN: 9781857885248.