Multinational corporations of India

By Rajalakshmi Rahul on May 22, 2012

A MNC (Multi- National Corporation) is an organization whose scope of operation is not limited to a single country. India today is improving industrially every day. Emerging talents and entrepreneurship has begun to create prosperity to Indian business sector. Start-ups and new ventures are increasing day by day in India (Pradhan and Abraham, 2005).

Globalization of Indian multinational enterprises which were undertaken historically through Greenfield investments is now taking place through mergers and acquisitions across nations. Outbound acquisitions and mergers from India, according to Grant Thornton, stood as 198 in number in the year 2010, with a value of 22.5 billion dollars, when compared with the previous year 2009, which was 82 in number, whose value were worth 1.38 billion dollars, which is remarkably high (Chandan, 2011). The following figure illustrates the numbers of acquisitions and merger operations that took place between the years 2009 and 2011 along with their value.

Figure 1: List of mergers and acquisitions in India
Figure 1: List of mergers and acquisitions in India, (Source: Sivakumar, 2011)

As the above figure shows, the outbound mergers, that is, investment by Indian companies in foreign nations is higher in number than that of its inbound mergers. This makes it clear that the internationalization process is taking place at a rapid pace in India. Similarly, according to a weekly supplement of Reserve Bank of India, India’s foreign exchange reserves as on June 4 of 2010 was around 271 billion dollars, which was an increase of 9.87 billion dollars  over the same period in the year 2009 (Oifc, 2010).Outbound mergers and acquisitions are keeping on increasing every day. Internationalization of Indian organizations is taking place in almost all sector right from automobile sector to pharmaceutical sector. The following figure shows the sector wise distribution of foreign acquisition by Indian organizations from 2002 to 2011.

Figure 2: Sector wise distribution of foreign acquisition by Indian organizations between 2002 and 2010 (Source: Buckley, Forsans, and Munjal, 2009)
Figure 2: Sector wise distribution of foreign acquisition by Indian organizations between 2002 and 2010 (Source: Buckley, Forsans, and Munjal, 2009)

Moreover it has been identified that almost 83% of the value of outbound acquisitions in India between the years 2000 and 2009, was made in developed countries.

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