Two articles in today’s newspapers made me think two
business houses (or rather families) will be the biggest beneficiaries of the
upcoming policies and Govt. spending.
First news item is, Anil Ambani getting into defense
manufacturing - http://economictimes.indiatimes.com/industry/indl-goods/svs/engineering/anil-ambanis-reliance-group-forays-into-defence-manufacturing-sector/articleshow/46206018.cms?imageid=45757525#slide9
Ambani’s always meant business – the senior Ambani built the
empire from oil to textiles, and his sons took it further getting into Telecom,
Retail, Energy, Infra, and you name it. They always knew next big what and made
sure they are there. But see that they are quick to cut loss and exit when their
new businesses do not make money (like Reliance Timeout). Now Anil is keen to
enter into defense manufacturing. Do they have experience in that – you may ask
but it does not matter is what you will realize quickly. The biggest challenge in India
is to work with Govt. and its bureaucracy, they can beat competition there and the
lack of experience is made up by hiring the experienced from industry. Anil
hired a former managing director from Lockheed Martin to lead this business. You
can see he will make this happen.
And another news item is, Adani’s plan to get into Airport sector via
Ahmedabad - http://timesofindia.indiatimes.com/business/india-business/Adani-eyes-airport-foray-via-Ahmedabad/articleshow/46207279.cms
Gutam Adani already runs Infrastructure business. His company operates ports in Gujarat – so why not operate Airport too? Again the success here depends on ability to work with Govt., and securing long term finance at low costs as rest of the project related skills including technology can be hired or bought and some of the works can be outsourced through contract works. It is how he transformed his small scale businessman into billions worth enterprise.
With the ‘Make in India’ initiative, both Govt. spending and private investment are expected to go up significantly in the manufacturing and infrastructure sectors. And you know who is set to ride that wave. They already made news today and you will see their fortunes rise too in the coming years.
It was known to happen.....
ReplyDeleteTrue. They are already running the country and their significance will only increase. They are now what Tata and Birla were to India before.
DeleteI agree that Ambani's have good connections, but I really hate them, though i have shares of Reliance Industries since last 3 years. The reason being, they have hardly done anything good for their Stakeholders in the recent past.
ReplyDeleteOn the other hand, Adani Ports and SEZ has been doing pretty well.
Yes, Alok. It is the power of capital and connections they play to get ahead. They move from one business to another to eat the cream. If you look through, most of the technology and skills is borrowed. For example, it is British Petroleum which helps Reliance in oil production. Look at the devices offered by Reliance Communication, they are made in China and elsewhere. Same with Adani's too. They are like brokers between Govt. and larger market. So they thrive in regulated market.
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