Republic Day 2018 | Biz groups that helped build Republic

Creating millions of jobs and fulfilling the dreams of a billion-plus Indians, these firms are the pillars of the economy

RIL

Mukesh Ambani, Chairman

RIL created world’s largest grassroots petroleum refinery at Jamnagar in Gujarat, India, with a capacity of 660,000 barrels per day (33 million tonnes a year), and integrated it with petrochemicals, power generation, port and related infrastructure. The company’s refining business delivered double-digit refining margins for the 12th consecutive quarter.In June last year, RIL, in partnership with BP Plc, announced investment of Rs 40,000 crore in the Krishna Godavari block over the next 3-5 years.

Though domestic operations are expanding, the international operations have not been as per the expectations. RIL, at one point of time had around 16 conventional oil and gas assets, most of which it has exited in recent years. Likewise, the company once held 42 blocks, which have come down to 7 including 2 CBM blocks. In the telecom sector, RIL revolutioned the industry with cheap data and free calls, forcing competitors to match the tariffs. The company’s telecom unit Reliance Jio, which entered the sector in 2016, has already turned profitable.

ITC

Y C Deveshwar, Chairman

Set up at the turn of the century in 1910 as Imperial Tobacco Company of India by British American Tobacco Co, ITC Ltd has completely transformed itself into a purely Indian company contributing significantly to the real economy through its significant presence in sectors like agriculture, food processing, hospitality, paper, textile, packaged foods and information technology. Over the years, starting in the 70s, the company has been gradually reducing its dependence on tobacco-based products by venturing into completely unrelated sectors, starting with hotels, always conscious of the importance of the contribution of each of these business areas on the economy.

The company’s e–Choupal initiative is enabling agriculture significantly enhance its competitiveness by empowering Indian farmers harnessing the power of the internet. Today, the name ITC is no longer an acronym, delinking itself fully from its past and proud of creating and nourishing several notable Indian brands that don’t need to send out foreign exchange as is being done by several multinational MNCs. In fact, ITC is one of the country’s biggest foreign exchange earners bringing in over $3 billion in the last decade.

HDFC, HDFC Bank

Deepak Parekh, Chairman, HDFC

If Indians are buying a dream home even before their reach their thirties, then India’s first housing company set up in 1977, HDFC Ltd, is responsible for it. It made a business of selling mortgages a profitable venture by introducing the concept of EMI for buying homes and has so far financed 61 lakh homes. The company that started with an equity capital of Rs 10 crore in 1971 has a market cap of over Rs 3 lakh crore as on January 18, 2017. Now, HDFC’s average loan disbursements every five days is more than what it disbursed in the first 13 years cumulatively. In 2016, HDFC became the first Indian corporate to issue rupee-denominated bonds (masala bonds) on London Stock Exchange.

HDFC was perhaps the only company that assisted government to set up housing finance companies, i.e., its own competition in the larger interest and the regulator, National Housing Bank. It has now grown into a financial conglomerate with presence in banking, life insurance, non-life insurance, asset management, real estate fund, education finance and education. HDFC Bank is the largest private sector bank with a balance-sheet size of Rs 9.49 lakh crore. It was among the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The lender commenced operation as a scheduled commercial bank in January 1995. The steady growth in its advances has helped expand its network. At the end of December 2017, the bank had 4,734 branches.

LIC

V K Sharma, Chairman

Life insurance Corporation of India (LIC) is the largest life insurer in the country. The huge corpus of premiums it collects has made it the largest domestic institutional investor in the country, with investments in most big Indian companies. At Rs 19,000 crore, the insurer earned a whopping 72% more profit from its equity play in FY17 as compared to the previous year. LIC was set up in 1956 after the Parliament of India passed the Life Insurance Corporation Act with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost.

LIC continues to be the dominant life insurer even in the liberalised scenario of Indian insurance and is moving fast on a healthy growth rate of 16.67 % every year. The claim settlement record of the company is also one of the best in the industry. According to the insurance regulator’s latest annual report, LIC has once again topped the list in terms of zero pending complaints and best death claims settlement.

GODREJ GROUP

Adi Godrej,Chairman

A business institution launched 120 years ago by Ardeshir Godrej as part of India’s Swadeshi movement, it found the keys to success by setting up a business back in 1897. It has many firsts to its credit including world’s first vegetable oil soap, safest safes that can survive a devastating explosion, ballot boxes for India’s first elections in 1951, among others. With revenues of over $4.1 billion the Godrej group, currently led by its chairman Adi Godrej, caters to over 1.1 billion consumers globally. In fact, its geographical footprint extends beyond earth with its engines powering many of India’s space missions. Interestingly, the group has also been contributing extensively toward building India’s defense capabilities and in December 2017, Godrej Aerospace handed over the 100th set of airframe assemblies to BrahMos Aerospace for use in its missile systems.

The group has interest across diverse sectors like real estate, consumer products, industrial engineering, appliances, furniture, security and agricultural products. Approximately 23% of the promoter holding in the group is held in trusts that invest in the environment, health and education. A supporter of the World Wildlife Fund in India, it has developed a green business campus in the Vikhroli township of Mumbai, which includes 200-acre mangrove forest. The group pioneered the green building concept with the launch of the CII – Sohrabji Godrej Green Business Centre (GBC) in the year 2000, in Hyderabad, which is also among the greenest buildings in the world.

TATA GROUP

Natarajan Chandrasekaran, Chairman

Founded by Jamsetji Tata in 1868, Tata Group is a truly global enterprise comprising over 100 operating companies in as many countries across six continents, including 29 publicly-listed firms with a combined market capitalisation of over $130 billion. From assembling buses in Africa, serving kebabs at London’s ritzy Bombay Brasserie, selling bags of salt in Indian supermarkets and makes Jaguar Land Rover luxury cars among others, the business group has been streamlining its focus, paring debt and exit businesses that don’t fit its priorities. Recent times saw many defining moments for Tata Group, from the return of Ratan Tata to effectively manage a crucial leadership transition to the selection of Natarajan Chandrasekaran as the chairman of the group. Popular as Chandra, he was instrumental in converting Tata Consultancy Services, the group’s IT services and consulting arm into the brightest star within the group, has proved himself in a short time, showing that he can effectively provide leadership to a highly diversified business Group.  

The house of the Tatas, under its new leader, is taking a re-look at all its businesses, big or small and working on restructuring those which are not value-accretive or sustainable.  So, while Tata Motors is reinventing itself as the maker of passenger vehicle of choice, Tata Global Beverages is shedding some of its overseas businesses which haven’t yielded expected results. The group is also focusing on the ‘core themes of simplification, synergy and scale’ across six to seven major business segments, Chandrasekaran had recently said at the World Economic Forum in Davos, Switzerland.

ICICI BANK

Chanda Kochhar, CEO

Ever since it was set up in 1994 as a private sector bank from being a financial institution, ICICI Bank unleashed a retail revolution in India. When ICICI set up branches and sold home loans through a network of direct selling agents (DSAs), everyone began to dream of owning a home or a car in the late nineties. The home, car and the credit card market expanded and a new middle class was born. That was the time when branch licences were controlled by RBI.

ICICI Bank dotted the landscape with ATMs. Last year, it became among the first to use artificial intelligence in a large way in multiple operations in the bank as well as on the website and mobile applications. It has total consolidated assets of Rs 986,043 crore ($152.0 billion) as on March 31, 2017, and profit after tax of Rs 9,801 crore ($1.5 billion) for the year ended March 31, 2017. It has a network of 4,850 branches and 14,164 ATM’s across India.

STATE BANK OF INDIA

Rajnish Kumar, Chairman

State Bank of India is country’s largest and oldest lender with a sterling legacy of 200 years and controls a quarter of the bank credit in India. After it merged five of its subsidiaries with itself, SBI moved several notches up to be one of among the top fifty global banks in the country with a balance-sheet size of Rs 34.45 lakh crore. The bank, which has a customer base of 42.04 crore, focuses on both retail and corporate lending.

While until 2008 the focus was mostly on corporate loans, the bank realised that it had a big potential in retail loans. Within a decade, it has become the largest home financiers, second-largest credit card company and one of the largest car loan financiers in the country. Founded in 1806 as Bank of Calcutta, it was the first bank established in India. With the government holding over 61%, it is considered as the nation’s bank. In the period immediately after the financial crisis of 2008, SBI was a key lender to kick-start the lending, especially the retail loans by reducing the rate of its home loans to ignite the demand in the economy.

BHARTI AIRTEL

Sunil Bharti Mittal, Chairman

Since the advent of mobile services in India, Bharti Airtel has been a household name. It was one of the first private players to enter mobile industry when the government opened up the sector in 90s. The company, owned by Sunil Bharti Mittal, started its telecom services business by launching mobile services in Delhi (India) in 1995. Since then there has been no looking back and Bharti Airtel is currently the largest mobile service provider in India and third globally in terms of subscribers with presence across 17 countries in Asia and Africa.

Founded in 1976, Bharti Group has grown from being a manufacturer of bicycle parts to one of the largest business groups in India with varied interests. With an entrepreneurial spirit and passion to undertake business projects that are transformational in nature, Bharti has businesses in telecom, insurance and retail segment. Bharti Airtel has been a witness to many ups and downs in the telecom industry but has maintained its stronghold over the sector even after an aggressive competition started by the entry of new player Reliance Jio, owned by Mukesh Ambani. Bharti also has a strong philanthropic arm, the Bharti Foundation, which is reaching out to about 240,000 students, engaging about 8,000 teachers across 13 Indian states through its initiatives in the education sector. The Foundation is also involved in supporting sanitation and hygiene awareness initiatives along with free legal aid for underprivileged undertrials. Its sanitation initiative, the ‘Satya Bharti Abhiyan’ is benefitting nearly 90,000 individuals in Punjab’s Ludhiana District, according to the company.

SUN PHARMA

Dilip Shanghvi, Managing director

The pharmaceutical giant established by Dilip Shanghvi in 1983, with just five psychiatry products and a two-person marketing team, is now one of the top five specialty generic pharma companies in the world. The company, which has a market capitalisation of Rs 140,620 crore as on 24th January, 2018, and net sales of Rs 30,264 crore in FY17, has over 40 state-of-the-art manufacturing sites spanning six continents. The firm’s manufacturing operations are focused on producing generics, branded generics, speciality, over-the-counter products, anti-retrovirals, active pharmaceutical ingredient and intermediates in the full range of dosage forms. The company that got listed in 1994 after a successful initial public offering has a spate of acquisitions in its bag, the most notable being that of another Indian pharma firm Ranbaxy in a $ 4-billion landmark transaction. As on 24th January, founder Dilip Shanghvi, with a fortune of $13 billion, was ranked 113th on Bloomberg’s list of world’s richest.

MAHINDRA & MAHINDRA

Anand Mahindra, Chairman

Mahindra & Mahindra (M&M), part of $19 billion multinational conglomerate Mahindra Group, is one of the leading players in the utility vehicles, information technology, financial services and vacation ownership sectors in India. It is also the world’s numero uno tractor brand selling 262,992 tractors in fiscal 2017. Additionally, it has a strong presence across diverse businesses including agri, components, commercial vehicles, speedboats, consulting services, energy, industrial equipment, logistics, real estate, steel, aerospace, defence and two-wheelers. The Mumbai headquartered Mahindra Group employs over 240,000 people across 100 countries. The group’s foray in the two-wheeler segment is yet to take-off as its ailing subsidiary Mahindra Two Wheelers Ltd (MTWL) is reportedly trying to re-invent itself by aiming to bring losses and at the moment is just keen on acquiring some well known international brands. The company is betting big on the farm equipment sector and had recently presented a concept model of autonomous tractor. Having invested around Rs 600 crore in electric vehicle (EV) business -- since the acquisition of Bengaluru-based Reva Electric Car Company in 2010, the management is planning to make a similar amount of investment in next over 3-5 years across the EV ecosystem.

INFOSYS

Salil Parekh, CEO

Set up in 1981, Infosys has been at the helm of the Indian IT industry. The first Indian IT company to be listed on Nasdaq, the company was started with a capital of $250 has now grown to become country’s second-largest software services exporter with revenues of about $10.7 billion.

Started by seven former employees of Patni Computer Systems, including N R Narayana Murthy, Nandan Nilekani, S Gopalakrishnan and others, Infosys employs 200,000 people and has a market capitalisation of approximately $35.4 billion.

Infosys touched $100 million revenues in 1999 and $1 billion in 2004 and interestingly, crossed $1 billion revenues in a quarter in 2007. It is also listed on NYSE.

Since inception, the company has been at the forefront of all major technological changes that made India a global destination for software services.

Though, last year, the company made news for all the wrong reasons. Vishal Sikka, CEO of Infosys, resigned after a year-long acrimony after few founders led by Murthy raised issues of poor corporate governance and severance package of a former employee besides raising questions over acquisitions.