“Indian companies are increasingly buying up companies abroad as strategic acquisition, indicating the growing competitiveness of the Indian corporate sector,” the India Brand Equity Foundation (IBEF) stated in an article on its website.
In the U.K., Indian companies were the second-largest foreign corporate employers in 2009, after U.S. corporations.
In 2009, close to three-fourths of India’s outward-bound investments were to Singapore, Sudan, Mauritius, the British Virgin Islands, and the United Arab Emirates. The value of these investments, which ranged from full to minority ownership, amounted to $8.4 billion.
Indian companies closed on 15 negotiated business deals worth $28 million in August 2010, which is 2.5 times more than the $8 million used on deals during the same month in 2009, according to a recent analysis by Grant Thornton India.
During the first half of 2010, Indian companies invested in 129 companies outside their borders with a total value of $18.3 billion.
Investing in America’s Future
In 2009, India was not among the top 20 foreign nations investing in U.S. businesses.
However, business between the United States and India is flourishing. “Commercial relations between the U.S. and India will help bring jobs to the U.S. For example, just in the past five years, 96,000 manufacturing jobs were created in the U.S. through exporting to India,” said Manish Antani, vice chairman at Barnes & Thornburg LLP, a global law firm, in an e-mail interview.
Antani, whose main interest involves creating businesses that are not only outbound to India, but also inbound to America, has recently hosted a large event called “Why You Should Do Business with India” in Indianapolis, with over 30 Indian corporate leaders from the technology, energy, education, and manufacturing sectors in attendance.
Being of Indian descent, Antani is in a favorable position to connect U.S. and Indian business leaders, with the focus on creating jobs in the United States.
“My personal interest is to grow jobs in America, whether that is through trade with India or any other country. My cultural and professional background allows me to be a facilitator of relations between the U.S. and India,” Antani said.
Antani, well aware of the unemployment situation in the United States, added, “Particularly in the Midwest, manufacturing has been suffering, so these jobs come at a critical time (in the midst of a recession) and in a sector that has been hit particularly hard (manufacturing). Importantly, India’s market opened very recently, and we are only at the cusp of the benefits that will come to the U.S.”
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But bringing businesses to the U.S. is not an easy task for most Indian companies.
“It is also important to recognize that the U.S. is competing with the rest of the world to benefit from the Indian market. Our goal should be to position American companies to benefit from this increase in opportunity,” said Antani, feeding into the Obama administration’s U.S. job creation effort.
Understanding market forces and that 75 percent of workers are in the employment of companies with less than 250 employees, Antani’s efforts are geared toward bringing small- and mid-sized firms together.
“Most often, businesses from India only visit the largest U.S. companies. A goal of this event [Why You Should Do Business with India] was to build relations with small- and mid-sized U.S. businesses because these drive job growth in America,” Antani said.
The goal was not just to bring businesses together, but to also increase awareness of the large Indian market that could absorb more sales coming from the United States.
Investments From India
“Indian companies have made significant investments in the U.S. in a variety of areas. These include traditional sectors, like manufacturing and IT, and untraditional sectors, like education and hospitality,” Antani said.He went on to say that details, including the sale price and anything else that has to do with the sale, are generally kept confidential when smaller- and medium-sized companies are sold, which is just opposite of when international or large companies, mainly those listed on the stock exchanges, go on acquisition sprees.
Earlier this month, India-based OnMobile Ltd., a 10-year-old company, bought U.S.-based Dilithium Networks Inc., a Silicon Valley firm that is known for its 3G video technology and solutions.
“This acquisition–OnMobile’s third in four years–will reinforce OnMobile’s growing dominance in the value-added services industry globally,” OnMobile said in its recent statement following the deal.
Educomp Solutions Ltd., one of India’s largest education suppliers, acquired a 51 percent stake in U.S.-based Learning.com, becoming the majority owner for close to $25 million.
“Educomp’s investments benefit the U.S. in two key ways: first, the continued employment of American workers, and second, by a world-class company providing quality education services to America’s youth,” Antani said.
Indian Glodyne Technoserve Ltd, a leading technology management firm, bought U.S.- based DecisionOne Corp., also a large technology service company for $104 million.
“Glodyne expects to significantly strengthen its position in the North American market with the addition of marquee clients and more than 2,000 highly skilled professionals,” DecisionOne said in a July press release.
“The hospitality industry has received investment from India. Boston’s Ritz-Carlton Hotel, one of the city’s best known landmarks for over 80 years, was purchased by a subsidiary of the Tata Group for $170 million,” Antani said. The deal was closed on January 11, 2007.
This year India’s Avantha Group acquired the U.S.-based Pyramid Healthcare Solutions for a total of $20 million, paying $14.5 million upfront.
“This acquisition is a strategic fit to boost our growth plans. It will create value for us in the field of Business Process Transformation (BPT) and consultative solutions through the use of efficient technologies,” said Manoj Malhotra, chief executive Officer at Salient Business Solutions & Pyramid Healthcare Solutions, in a press release.
