Mgmt Guru C.K.Prahalad's Dream for India 2022, India's most investor friendly companies

Imagine 14 years into the future. The year is 2022. Independent India turns 75. At least 30 Indian companies are on the Fortune 100 list; India accounts for 10 per cent of global trade; it has a base of 200 million college graduates; and is a chief source of all global innovations. In an exclusive article written specially for Business Today, C. K. Prahalad, who is one of the world’s best-known and most respected management thinkers, lists six possibilities and goes on to show how India could, indeed, achieve them.

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Prahalad’s plan

An India that's home to 30 of Fortune 100 companies, the world’s largest pool of technically-trained manpower, and Nobel Prize winners in arts, science and literature? That’s management guru C.K. Prahalad’s dream for India@75, and he’s got a plan how to get there. A Business Today exclusive.
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How to build 30 of the Fortune 100 companies out of India
How to create a trained workforce of 700 million people
How to get a 10% share of global trade

As the celebrations of India @60 wind down and as the national attention is consumed with problems of the moment—price of energy, inflation, debt relief to farmers, political realignment in the states—it is hard to focus attention on the future of India. The urgent is likely to drive out the important. Moreover, it is easy to get carried away by growth statistics of the past five years and feel “we have arrived”.

C.K. Prahalad Leadership, however, is about the future, about hope and change. Leaders must elevate the national debate and focus on the potential of India. A shared view of India@75, for example, can provide a framework for building a multi-stakeholder consensus and making choices that are directionally consistent with that goal. Unless we are clear about the potential, it is very difficult to undertake an arduous journey.

I believe that India has the potential to actively participate in shaping the emerging world order. This demands that India must acquire enough economic strength, technological vitality and moral leadership to do so. Just economic strength and technological maturity is not enough. We know that the Soviet Union and Nazi Germany had economic and technological muscle. They failed. Morality is an integral part of leadership. We should emphasise all three dimensions, in equal measure, in India’s march to Her destiny.

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India's most investor friendly companies

Until early this year, it didn’t take much to make you happy if you were an equity investor. India seemed like the flavour of the decade, India Inc.’s flagbearers were snapping up big rivals elsewhere in the world, and Sensex at 25,000 was where we were all headed (gosh, all that seems so awfully long ago now). Cut to today, investors are licking their burnt fingers and swearing never to touch equity again. Not surprising at all. In a stock market that has plunged from 21,000-something to less than 15,000 now, there’s hardly anyone—small or big investor—who hasn’t lost money.

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But it’s equally true that equity provides the best returns over the long term. So, if you are in for the long haul, who should you be investing with? Which are the companies that treat their shareholders like kings? Which companies announce their results on time, hold their annual general meetings every year and, most importantly, have a history of paying dividends consistently? As you can probably imagine, there aren’t too many of them. What makes it harder still for companies is our methodology, which makes them jump through some tough hoops (see How We Did It on page 154). For example, to make the cut, a company must have had extraordinary appreciation in its stock price for three years in a row, among others.

The list on the left, then, represents companies that have delivered on our methodology’s demands. You’ll find the Top 10 featured on the pages that follow. As you can tell, these aren’t (minus a handful) the biggest companies in corporate India, but they are—well, in some sense—like Gautam Gambhir: they won’t give you sixes every over, but they score steadily over the long haul. So, if you are betting on stocks for the long term, this is a good list to start with.

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Source: Business Today