New era of competition beckons

It would be difficult at this stage to decide on which company could set a new trend in 2011: the BM Munjal controlled Hero group has bought off Honda Motors' 26 per cent stake in Hero Honda with a market value of nearly $2 billion, or i-GATE's purchase of Patni Computers.

Analysts would like to believe that the Hero-Honda divorce deal helps Honda strike out alone in the Indian market but by the same token it leaves the Hero group room to find its own identity in newer products such as three-wheelers.

What it has done is a trend-breaking acquisition after a year in which many Indian blue chip companies especially in the pharma sector walked up to the negotiating table and then ran to the bank.

AGAINST THE GRAIN

The Munjal-led Hero group split from Honda Motor after a marriage of 26 years in which it rode piggy-back on the Honda name; now it has put its money on the line for an independent existence as a competitive brand; in the bargain it pitches itself against the Japanese giant not just in India but globally.

Cut to the IT sector and what we have is another instance of assertion, not one Indian company against a global name but an outsider of sorts nibbling at the heels of the top five Indian IT companies, now increasingly exposed to headwinds from newcomers like Philippines.

When i-GATE's Phaneesh Murthy acquired Patni Computers he did more than turn his outfit into a billion dollar company knocking on heaven's door. He sounded the first tocsin for the guiding lights of India's IT ‘revolution'. i-GATE asserts a hope that India's IT sector will not become the ossified monolith that its manufacturing counterpart still is after all the liberalisation.

What has changed since the Monopoly Restrictive Trade Practices Commission's lethargic policing of an industrial landscape dominated by geriatric industry houses, other than the fact that it is now peopled by a smaller number of middle-aged industrial firms aging from a lack of competition in the domestic markets from below?

Consumers are what brands make them and Honda reigns supreme mainly because of its phonetic allure; with increasing standardisation what else distinguishes Toshiba from Phillips but the relative enchantments of their TV commercials? So when Hero decides to part ways it does something for that competitive spirit among producers that seems to have petered out in an age that glorifies it. Both Hero and i-GATE break the textual and rhetorical maze in which budding enterpreneurial possibilities invariably meet their anonymous fate in a placement in the top five. Not all the professors from American academe or the rash of Indian management schools can offer even the faintest clue as to what it takes for an entrepreneur to match the net worth of the Sensex 500. But capitalism's potential for individual enterprise has always lain in that possibility and someone like Facebook's inventor confirms that possibility.

But corporate India has always presented a dreary landscape of sameness; open the pages of some financial print media and the same faces stare out in bored arrogance or souped-up excitement shaking hands with a new minister of the environment.

What we witness in the Munjal-Hero buyout of Honda and the i-GATE purchase of Patni is more than just an assertion of Indian-ness, as if that mattered at all. What both reflect are the first gingerly steps towards a more dynamic corporate India, hopefully fluid in its constituency and with revolving doors.

RISK AVERSION

Why is it necessary, one might ask. For a nation of one billion and with a growing number of billionaires among industry, with Indian companies reaching out as global players, the record of inventiveness is pretty dismal; in large part, this is because of the same reason that allowed monopolies to flourish in the license raj: the aversion for risk, the comfort of success.

So long as the worship of the accomplished fact remains the abiding credo in mainline industry and in management schools among students, not all the Phaneesh Murthys and Munjals will change India's ossified climate for individual enterprise.