Sahad P V reports on the managing agencies and "adventurous" ndian enterprises that once dominated corporate India
You are unlikely to find their names if you run an eye down Business Standard's annual list of 1,000 largest companies (by sales). Yet in their day, they wielded as much power, if not more, as do the chiefs of India's leading companies today.
In the early part of the century, the giants of business mostly had English names all headquartered in magnificient buildings around Calcutta's Dalhousie Square. These were the managing agencies with major sterling shareholdings - Andrew Yule, Martin Burn, Bird, Gillanders Arbuthnot, Shaw Wallace, Balmer Lawrie.
Their interests were as vast as tea, jute, coal, navigation and insurance, and they were far more vertically integrated than many of the big business houses of today.
In Industrialisation in India historian Rajat K Ray quotes Allister Macmillan on their size and clout. "If a steamer meets with an accident and arrives in a damaged condition at Calcutta the firm can discharge her, repair her, paint her inside and out, engage the requisite cargo for her return voyage, load her, insure her hull and cargo if necessary, supply her with bunker coal and stores, and despatch her without having to go outside the concerns which they control, being, it may be added, the only firm in Calcutta who can do so."
In 1902,the eponymus Andrew Yule had four jute mills, an inland navigation company, a cotton mill, 15 tea units, four coal companies, two flour mills, an oil mill, a railway company, a jute press house and a zamindari company. "Yule was the Ambani of the day," says business historian Raman Mahadevan. In 1951, the group had a net worth of Rs 24.55 crore.
But the managing agencies' dominance started declining from the 1920s. By 1965, when the system was abolished by RBI governor I G Patel, they were shadows of their former selves. Andrew Yule became a full-fledged public sector undertaking in 1979.
The fate of other leading agency houses was similar, except for those that went into the hands of upcoming Indian business houses like the Goenkas, Khaitans, Bangurs, Thapars, and Jalans.
What about the large Indian business houses that haven't been able to stand the test of time? Prominent among them was Walchand Hirachand, one of the most enterprising industrialists in the early part of the 20th century. The managing agencies' focused on sound business. As Ray writes, "...the task of pioneering new ventures in unexplored fields fell mainly to multinationals with specialised technical knowledge...or Indian houses with a speculative (e.g Dalmia) or adventurous (e.g Walchand) bent of mind."
Walchand Hirachand, originally a Jain from Gujarat, set up Scindia Steam Navigation in 1919 in collaboration with Narottam Morarjee and Kilachand Devchand and Premier Automobiles in 1944 and Hindustan Aircraft in Mysore.
Scindia Steam was the largest private shipping line at the time and Walchand's flagship. By the eighties, dissensions between the partners and a worldwide slump in shipping pulled the company under. Today, it is a loss-making company (losses: Rs 19 crore in March 1998) owned by the government.
Premier Automobiles (now managed by a Walchand scion Vinod Doshi) has had to give way to newer entrants like Maruti and Hyundai and its remaining plant now manufactures the Siena and Uno for Fiat of Italy.
But in the 1940s and 1950s, the carmaker had produced popular models like Dodge, Plymouth and Desoto (with Chrysler Corpora
