[Guest post by Vinayak Sambargi]
Enterprises that are going to shape INDIA for the next 20 years
This is not a list of stock picks! The list is purely based on my perception of the way the companies might grow and help in shaping the INDIAN economy in the coming 20 years.
This list is not focused on the companies that would create huge revenues and profits, or massive wealth for their investors. This list illustrates companies that would be the face of the new emergent INDIA, companies that would create newer growth avenues not just for themselves but for the economy. These companies, I believe would also generate huge employment opportunities in INDIA as well as abroad, make tremendous social contributions and be global leaders.
This group of company would be at the helm of the major infrastructure and energy reforms that will happen in the country in the coming decade. From building roads to cities, to building 10,000 MW power plants they will always want to participate.
The communications business will not only remain a leading provider of cellular services but diversify to more telecom businesses across the globe. The company will expand its cellular service business to cater to a huge growing cell-phone service user base. It would provide some most advanced cellular services at highly effective rates. It will target some emerging markets and also make huge overseas acquisitions across the globe.
The energy enterprise will build power plants all across INDIA from gas to hydro to nuclear (coming soon!). It will become one of the largest producers and distributors of power. It will make tremendous contributions to the rural economy by distributing electric energy to many rural parts of the nation. The enterprise will influence the energy policy reforms in the country.
The flagship refining company would grow on to become one of the largest oil refining companies in the world. Their next phase of development would also include setting up refining and distribution setups outside INDIA. Oil would continue to dominate the energy-economy around the world and Reliance would make the best out of it. Their next big growth would mainly come from oil refining establishments outside INDIA. They would also invest towards research towards agro-based oil (ethanol) and some other alternative sources. The company will make huge advancements in the renewable energy space too. The untapped solar energy business will see a huge growth in INDIA and Reliance would be a key player in this spectrum. It will cater to the huge energy demand in the country and across the globe. This would also gain the company some credibility in terms of being an advanced player w.r.to securing energy resources.
Beyond market share and revenues the company would largely influence INDIA's energy policies.
Retail; currently the most poised sector that is attracting huge attention of large enterprises like Wal-mart. Reliance is currently taking the slower approach, but it would soon come in all guns blazing to sweep this space. This business would create an INDIAN Wal-mart, perhaps would even be a better run enterprise; since it would cater to a larger mass and a different economy (more complex) compared to current Wal-mart's market. (One would see case studies based on reliance retail: how to effectively manage 20,000(or more!) stores.) The enterprise would be acclaimed for best in class supply chain and logistics management. It would also create tremendous employment opportunities both directly and indirectly.
SEZ: RIL would go on to create some of the world’s finest SEZ, mainly focusing on cities rather than just industrial centers. With best in class infrastructure and ideal economic environment for businesses to thrive, these centers would become hubs attracting business from across the globe. These centers would also represent the emerging culture of the country. The cities developed would go on to be one of the most excellent and finest in the world.
Infosys, big blue of INDIA:
Infosys would represent the technological face of the INDIAN economy. They will aggressively participate in making technological contributions to the nation. The company will set standards in terms of corporate governance and excellent management practices. The company will go on to become one of the largest outsourcing and consulting company in the world. It might not surpass some of the big IT and management consulting giants but would certainly would be the preferred partner by most of the Fortune 500 companies. It will go on to set higher standards in the IT Consulting and business process management. The company will soon capitalize on the domestic economic growth. The organization might not be a huge enterprise in terms of revenues or profits but it would certainly be the most preferred employer, an enterprise with one of the best corporate social responsibility policies and would set world class standards for management practices. It would also make huge contribution towards the education and research in INDIAN institutions. The organization will make tremendous contributions towards pioneering IT research in INDIA.
The TATA enterprise will continue to consolidate its empire of existing businesses and focus on only a few of its best performing assets. (This would mean a few in-house mergers.) They would also focus on expanding globally rather than locally. But they would have a sufficiently large footprint in INDIA too. Their global presence and extensive range of products and services will soon make them a world renowned business enterprise (it is currently too, but it would also be recognized for its sheer size; maybe a Fortune 10 company.) Growth would mainly come from its IT services arm; TCS, Steel; Tata steel, Power and energy; Tata power and Motor vehicle division; Tata Motors.
The Tata group would set fine examples for effective corporate management. They would be one of the best managed multi-national, multi-business enterprises. The challenge for the Tata’s would be to create a management team that would be able to manage and sustain the growth of this conglomerate.
The company will do some phenomenal contribution towards the social development. Their contributions to the social cause will not be limited to INDIA and would go on to become one of the most charitable organizations in the world.
This financial institution has always been on the helm of recent financial reforms in the country and will continue to do so.
The single largest private bank in INDIA will grow on to become a major financial services company in the country. Growth would mainly come from the growing credit appetite of both individuals and corporations, enhanced financial services (mutual funds, forex, insurance and retirement plans, investment banking, investment management), and also largely through micro credit policies. They would find a huge growth opportunity in the rural sector and micro-financing. These segments are currently the least explored by the INDIAN private financial sector.
They will go on to become a highly well managed and most diversified financial firm in INDIA. They will not only provide financial solutions (not limited to banking) to the urban and semi-urban mass but also to the untapped rural mass. Other major growth sectors would be mainly commercial lending (the growing yen for credit by INDIAN enterprises) and overseas banking opportunities. ICICI will not limit it financial services to NRI banking and lending to INDIAN multinationals but would also create a presence in the global banking and financial space.
The main reason for me considering this for the list is not just because of the growth opportunity this company holds but mainly because it would be the financial face of the largest economy (soon to be) in the world. The company’s mettle would be tested when it would have to compete with some of the current world players.
As I mentioned earlier, this list of companies is purely based on my perception of how they would grow as enterprises. I would really love to see all these along with other INDIAN and international companies contribute towards the INDIAN social and economy development.
(The order in which the companies are listed does not represent any form of ranking or favoritism. I hold shares in most (if not all) of the above mentioned companies :) )