Indian cos that made headlines in 2011
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Indian companies that made headlines in 2011 included Infosys, Reliance Industries, Flipkart, Maruti Suzuki, Tata Group, Kingfisher Airlines, and SKS Finance. Key events were Narayan Murthy stepping down from Infosys after 30 years, Mukesh and Anil Ambani combining telecom businesses, Flipkart receiving $150M in funding becoming India's first billion dollar startup, Maruti Suzuki facing a six month labor strike reducing profits, Tata Group appointing Cyrus Mistry as successor to Ratan Tata, Kingfisher Airlines facing mounting debt and canceled flights, and SKS Finance founder Vikram Akula exiting amid criticism of its commercialized model.
Indian cos that made headlines in 2011
- 1. Indian Cos that Made Headlines in 2011 Bangalore: 2011 has been a witness to many critical happenings in the Indian business world. Some companies went through a roller coaster ride while some had a safe sail. Few companies saw only the success horizon also. While some companies were announcing their future successors, some were waving good-bye to their long term founders from an era of succession. Some became the meat of harsh criticism for bankruptcy and some for their 10 fold rise in revenues. On the whole the Indian business industry was in good shape in 2011. Here is the list of companies which made news in 2011: 1. Infosys: In the late August 2011, Infosys Co-founder Narayan Murthy waved good bye to his Chairmanship, making way to new leadership. He ended the 30 years of illustrious innings at Infosys, a company that he had found it with six other engineers. K.V. Kamath former ICICI Bank chairman was introduced as the new charioteer who would drive the vision of Infosys from here on. S D Shibulal was given the position of CEO and MD. Narayan Murthy continues to remain as the Chairman Emeritus at Infosys. "When I thought of (starting) Infosys on December 29, 1980, I frankly did not think I will bid goodbye to an Infosys of this size and this proportion", Narayan Murthy said, as quoted by IBN Live.
- 2. 2. Reliance Industries: We know them as the warring brothers. But little did we know that the two brothers would come together in 2011 to fix the issues that have crippled their telecom business. The siblings decided to put an end to their rivalry and create a harmonious environment with co-operation and collaboration. They made headlines, when Mukesh Ambani hatched a plan to combine his group with his younger brother Anil's telecom company to take another shot at the telecom sector for 4G services. "As leading telecom infrastructure and content service providers, we look forward to offering our services to RIL and other BWA players, even while we compete for customers in the market place through our choice of different technologies," RCom said in a statement. 3. FlipKart: Known as the 'Amazon of India', FlipKart made heads turn when they received $150 million funding from General Atlantic Partners. With the funding, the company's became the India's first billion dollar Internet startup increasing the company valuation to $1 billion. Sachin and Binny Bansal, coincidentally with the same surnames were the two who found Flipkart in
- 3. 2007. Initially known as the online bookstore, the company did r e ally well. Soon it made foray into general e-commerce products. The company is on its wave of success and expects a 10 fold rise in its revenue in the coming year. In an e-mail response to VC Circle, Pat Hedley, managing director (Corporate Affairs), General Atlantic said, "It is our company policy not to comment on investment opportunities that we may or may not be considering." In an email response, Sachin Bansal, CEO, Flipkart said, "Any discussion about funding is speculative. Being a privately held company, we would not like to comment on this." 4. Maruti Suzuki: Going through one of the worst moments in its history was Maruti Suzuki with a huge labour strike. The strike was so intense that went on for nearly six months and posted a fall of 60 percent in its net profit in its second quarter. It was the worst quarterly earnings for the company in more than a decade. Production was hit big time. making matters worse, the union labor leaders were paid huge sum to quit the company which disappointed long term investors of the company. The strike happened at a time when the Indian automobile sector was facing a sharp fall in demand due to rising interest rates, fuel and vehicle costs. Car sales in India fell in July in their first monthly decline in nearly three years. They continued to slide in August and September as reported by ET.
- 4. 5. Tata Group: Tata Group searching for a successor was a well known fact and it was the most anticipated corporate announcement of 2011. India's largest business corporation finally pronounced Cyrus Mistry as the successor after Ratan Tata. The youngest son of construction tycoon Pallonji Shapoorji Mistry, Cyrus comes from one of the affluent and richest Indian families with a net worth of $7.6 billion. Shapoorji Pallonji & Company is the single and the largest stake holder in Tata Sons with a stake of 18 percent. Cyrus Mistry has been managing director of Shapoorji Pallonji & Company, "The appointment of Cyrus P Mistry as deputy chairman of Tata Sons is a good and far- sighted choice. I have been impressed with the quality and calibre of his participation, his astute observations and his humility," said Ratan Tata while endorsing the appointment."He is intelligent and qualified to take on the responsibility being offered and I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement," Tata said. As per the group's retirement policy, he will retire in December 2012, as quoted by India Today.
- 5. 6. Kingfisher Airlines: Kingfisher Airlines was under immense criticism after there were dozens of flight cancelled after the company declared that it was part of a debt restructuring. On October 13, airline faced disruptions when state run oil company HPCL halted fuel supplies due to non-payment of debts. Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a mounting debt of Rs 7,057.08 crore. Together, the 13-bank consortium now holds 23.4 per cent stake in the airline and has an exposure of over Rs 7,700 crore. On December 2, the Mumbai Airport authorities (MIAL) have threatened to put cash-starved Kingfisher Airlines on a cash-and- carry mode again if the carrier fails to pay up the dues of around 90 crore. The development comes amidst reports that even the state-run Airport Authority of India has threatened to put the airline -- which is sitting on a debt of over 12,000 crore -- on cash-and-carry mode. The airline owes 240 crore to national airports operator and the move reportedly came, according to an official, after a cheque issued by Kingfisher bounced according to a PTI report.
- 6. 7. SKS Finance: India's only listed microfinance institution, SKS Finance saw the exit of its founder Vikram Akula who was once regarded as the epitomizer of the company. The company came under the scanner for its flawed business model that transformed it from a non-governmental organization to a completely commercial business enterprise. The company started tracking investor returns instead of providing financial help for the poor. The micro lenders also bagged a bad name after they started lending huge sum of cash to borrowers which went way above their capacity to return. Also aggressive debt recoveries were practiced which did disappointed investors. SKS now plans to cut its microfinance exposure and increase income from other operations, according to a DNA report.