Citation: Anita Hawser, Breaking Out, Global Finance. New York: Apr 2007. Vol. 21, Iss. 4; pg. 61, 3 pgs
Breaking Out
This article explains the progressive emergence of Indian companies, especially Indian IT firms on a global setting. The IT companies, as well as software-related service corporations are experiencing a great advancement concerning the development of their technology. The revenue growth resulting from this improvement enables them to expand their investment and foreign acquisitions throughout the world. These companies are not only willing to participate into global trade, but they most importantly have the capabilities and required funds to undertake such operations and investment activities.
What is interesting about this article is that it discusses the case of specific Indian companies involved in this trend. It also provides an explanation and justification of the ambitions of the Indian companies to buy global firms. I was exceptionally surprised to read on the article that the US-Canadian company Novelis (the world biggest aluminum producer) was bought by an Indian company called Hindalco Industries.
An example of the success of Indian IT service firms internationally is the listing of the first Indian company named Infosys on the elite Nasdaq-100 club in 1999. This achievement is exceptional because usually great companies such as Apple Computer or Cisco Systems are on this list. I found that it is encouraging for investors to know this about Indian firms because they would want to invest more on them.
This recognition has been possible because of the development of information technology services in India. Even if these companies have the necessary ability (monetary and financial capability) to purchase or trade acquisitions on a worldwide setting, they most definitely have to possess the information technology means to undergo such process. Thus, I believe the ambitions exist, but the technology is also available for them to benefit from such transactions, and this is very encouraging. More Indian companies will be influenced by this, and then will want to get their names out, expand their business portfolios and strive to be more integrated in the global trading system.
Another Indian company, Indusview is favorable to this trend because it “predicts that India's IT and software-related services sector will continue to perform strongly, reaching $21 billion in revenues in 2007.” If this prediction proves to be true, this will be a significant milestone for the country’s economics and financial standing in the world. The IT firms will keep on meeting the investors’ expectations, and in this perspective attract more investment possibilities at their favor. The one last prediction in the article which really persuaded me into believing in the future success of such companies came from the American investment bank Goldman Sachs, which “predicts that India has the potential to achieve rapid economic growth over the next 30 to 50 years if development proceeds successfully.”
Finally, I was surprised and glad to learn in the article that Indian companies are expressing an effective and efficient “entrepreneurial dynamism” in order to get ahead financially. An example of the entrepreneurship is the act of an Indian named Jignesh Shah, “who reportedly mortgaged his home to raise the seed capital for his company, Financial Technologies (India) Ltd, which went on to build a trading system for the Bombay Stock Exchange and India's first Multi Commodity Exchange.” In synopsis, the Indian financial and IT companies are not only ambitious but they have entrepreneurs who are succeeding in what they are doing so far.
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4 comments:
Fatou
Interesting article on India’s continued global growth in IT…and other industries globally. As the BRIC (Brazil, Russia, India & China) economies continue to expand their presence its interesting to see hear that they are acquiring western companies. India has been growing their technology expertise rapidly over the past several years, I wonder how this would effect the ability to acquire other firms and successfully integrate them as their economy experiences growing pains such as lack of skilled workers, increased costs and other scarcity issues.
M. Perednis
Fatou,
This was a really interesting article to read and I really liked reading your comments. I had no idea that Indian IT firms were growing so much. I also didn't know about the exchange listings of the companies.
- Jessica D.
This is an interesting article for me to read since all readers bring different experiences into reading--and I've lived in India and the majority of my family resides there currently. Interestingly, my cousin did exceptionally well in school and got a job with Infosys, beating out a myriad of other potential employees (something like 1,000,000 applicants per year). The social perspective is that working for an IT firm is the best thing to do, so India is transforming into an IT powerhouse. One thing that worries me, though, is that the telecommunications infrastructure and general city infrastructure in India is not keeping pace with the exponential growth in IT service businesses. Outsourcing of jobs to India is another concern, which is argued to have displaced a number of jobs. It will be interesting to see how things shape up in India, because their education system is extremely competitive and has potentially high rewards in a country that has low living costs.
It was interesting to know how India is growing globaly in IT field. I was surprised to know that Indian company had actually bought the one of the biggest company in the world in certain field. I am interesting to know how growth of India will affect other countries such as western companies in the future.
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