Indian companies — both private and government-owned enterprises — are becoming increasingly transnational, according to a survey by the Indian School of Business (ISB), Hyderabad, and Fundacao Dom Cabrall (Business School), Brazil. According to the Transnationality Ranking of Indian companies, the top five companies in the list have a Transnationality Index (TNI) greater than 50 per cent. Tata Steel topped the list by TNI.
The TNI combines three measures (percentage of international assets to total assets, percentage of international revenues to total revenues and percentage of overseas employees to total employees) to determine the overall degree of internationalisation of companies.
The survey has divided the ranking of companies by TNI into two categories. While Tata Steel stood first among companies which have an international asset base greater than $500 million, Core Education & Technologies topped the list among companies with an international asset base between $150-500 million.
| COMPANIES ACROSS CATEGORIES | |||
| Category | Rank 1 | Rank 2 | Rank 3 |
| Top 15 companies by TNI (International Asset Base >$ 500 million) | Tata Steel | Tata Global Beverages | Hindalco Industries |
| Top 5 companies by TNI (International Asset Base <$ 500 mn & Asset Base >$ 150 mn) | Core Education & Technologies | Polyplex Corporation | Subex |
| Top 20 companies by International Assets | Tata Steel | Bharti Airtel | Tata Motors |
| Top 20 companies by International Revenues | Reliance Industries | Tata Steel | Tata Motors |
| Source: ISB survey report TNI: Transnationality Index | |||
Companies have been ranked not only on basis of TNI, but also created a list for top 20 companies on the basis of the value of the foreign assets and top 20 companies ranked on the basis of the value of overseas revenues. Tata Steel topped the list among companies on basis of value of foreign assets and Reliance Industries topped the list in overseas revenue category. Oil and Natural Gas is the only public sector firm to feature in the list. It ranks fifth among the top 20 companies on basis of the value of the foreign assets.
A large number of companies in the TNI rankings have followed the strategy of inorganic growth through aggressive overseas acquisitions, said the survey. Some of them include Tata Steel, Hindalco, Suzlon Energy, Dr. Reddy’s Labs and Bharti Airtel. FDI has been primarily driven by the manufacturing sector-petroleum products, pharmaceutical and automobiles.
The survey also showed Indian transnational companies have shown a tendency for direct acquisition rather than minority acquisitions and joint ventures. It said the largest acquisition over the period from 2006-11 has been Tata Steel taking over the Anglo-Dutch steel major, Corus for $14.7 billion, closely followed by Bharti Airtel’s acquisition of Zain Telecom for $10.7 billion.
ISB is looking at leading a similar effort in Brazil to compare and contrast TNCs from India and Brazil. Partnerships are also being forged by ISB with schools in Russia and China to have a complete comparative BRIC survey.
The study covers the period from financial year 2008-09 to financial year 2010-11 and is based on data from 33 companies from the top 50 companies ranked by their consolidated international assets. The ranking methodology is based on the framework (Transnationality Index) developed by the United Nations Conference on Trade and Development.
