India Inc. busy buying foreign companies
Many Indian companies have been very busy making inroads into the US/EU markets recently. Other than outsourcing, which is the business buzzword today, this has taken the form of acquisitions.
While Chinese companies have been ruffling feathers by their BIG buys in the USA worth billions of dollars, Indian companies have slipped through the net because their acquisitions are much modest. Even so, India Inc. has bought $1.38bn worth this year so far!
And, it is not the BPO companies, which are so comfy at home, but…
it is the telecoms, manufacturing companies, and even the pharmaceuticals.
Indian companies, which had a very small presence in foreign locales just a few years ago, have inked 62 overseas deals worth $1.38 billion so far this year, buying up a variety of foreign outfits, from engineering design house INCAT International in Britain to Valeant Pharma in the U.S. That compares with just $202 million in deals in 2002. The Indian purchases have flown under the political radar because most of them are small — the average price of recent Indian acquisitions is just $30 million — and they usually don’t involve big-name companies.
This is possible today because of India’s liberlization policy. Some 10 years back, this would have been impossible, says BuisnessWeek, because the Govt. was jealously guarding the export of $$ from India.
But today, India has in excess of $140bn and so the companies are interested in buying foreign technology to strengthen their operations.
This is indeed extremely sensible of Indian companies which have of late made inroads into the world stage. Therefore, our companies are in dire need of improving their technology, for example, the pharma companies have been forced to shed their generic drug industry and pump more into R&D following the recent change in India’s Patent laws.
Also, as an update - only a few days back had I written that BSE has crossed 8500, today it is almost 8700!
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