With a market value of Rs 2.63 trillion, Maruti Suzuki India is driving the competition up the wall. A successful transition from small cars to sedans, premium hatchbacks, and utility vehicles has made sure that the competition remains a pygmy. One of India’s biggest success stories of foreign direct investment, the Suzuki-owned company has changed the way Indians commute. Maruti’s hard work has also been recognised by the stock market, as it has become the seventh-most valuable listed company in the country.
Sajjan Jindal, chairman and managing director of the JSW group, is turning out to be a beacon of entrepreneurship for the rest of Corporate India at a time when the economy is going through a slowdown. Betting on the future of India’s steel industry, Jindal’s JSW Steel has emerged the number one player with a capacity of 18 million tonnes per annum, overtaking the century-old Tata Steel. Jindal is now eyeing similar high-octane growth in the cement sector, where he plans to double his company’s capacity via acquisitions.
Outstanding achievements like those of Maruti and Jindal can hardly go unnoticed when a distinguished jury comprising the heads of a leading consumer company, a private equity fund and two marquee management and strategic consultancy organisations, a highly respected banker as well as one of India’s top legal eagles meets to decide the winners of the Business Standard awards for corporate excellence for 2017.
Scale, sustainability, leadership, and innovation were the buzzwords that figured prominently during the two-hour discussion here on Wednesday, when the jury, chaired by industry veteran R C Bhargava, met to select the best of India Inc.
“The jury deliberated for a long time to choose the CEO of the Year. It was a hard decision, considering there were so many good companies on the list. The statistics provided by Business Standard showed outstanding financial performance of all the shortlisted companies in trying times,” Bhargava said.
The other members of the high-profile jury were former State Bank of India Chairman Arundhati Bhattacharya, BCG Asia-Pacific Chairman Janmejaya Sinha, Cyril Amarchand Mangaldas Managing Partner Cyril Shroff, Bain Capital Private Equity MD Amit Chandra, EY India Chairman & Country Managing Partner Rajiv Memani, and Marico Chairman Harsh Mariwala.
“The CEO of the Year award goes to Sajjan Jindal as he has steered the JSW Group at a very difficult time. He was leading from the front and was very aggressive on expansion plans,” Mariwala said on the jury’s choice of Jindal.
All jury members agreed that while financial ratios were important for making the first cut, equal importance had to be given to individuals who focused on innovation and built institutions when challenges in the external environment were severe.
Besides statistics, the jury discussed qualitative aspects affecting companies, industry, and the business environment. The jury selected Maruti Suzuki as the Company of the Year, while Bharat Petroleum Corporation won the Star PSU of the Year award. 3M India won the Star MNC of the Year award, and Sheela Foam was declared the Star SME of the Year. Education app Byju’s was chosen the Start-Up of the Year.
Scale, sustainability, leadership, and innovation were the buzzwords at the selection process
Several names came up for discussion for these coveted awards but what tilted the scales in favour of the winners was the confidence of the jury in their business models, which changed with time. “Maruti has emerged as India’s leading car maker despite challenges in the industry. It has performed consistently and has rewarded both its shareholders as well as its customers with best products and after sales,” said Bhattarcharya during the discussion. Memani said, “The idea was to give the award to a company that has had a strong market impact, which Maruti did by strengthening its leadership position.” The jury chairman, Bhargava, recused himself from the discussion on the Company of the Year award as he is Maruti chairman.
The jury discussed several outstanding individuals who have left a deep and lasting impact on India’s corporate history, but quickly decided on HDFC group Chairman Deepak Parekh as the winner of the Lifetime Achievement award. “Deepak Parekh was an easy choice for his fantastic contribution to the financial world and industry in general,” said Shroff.
While Parekh’s impact on the world of finance is well-known, he has emerged as India’s most authoritative voice when it comes to ethics and best practices. Parekh has solved many crises in the Indian corporate and financial sector, including salvaging Unit Trust of India and Satyam Computer, when both organisations were in trouble. And that’s why Parekh is the go-to man for policymakers and the government. Parekh has a view that he isn’t shy to express, be it on the goods and services tax, or policies of the Reserve Bank of India, or the government.
Parekh has made clean business not only a cornerstone of how the HDFC group is run, but also embodies that spirit in his dealings with others in the world of business and politics. It’s not a surprise then that young professionals often turn to him for advice.
“Deepak has not only led the HDFC group for many decades but has also helped many companies make strategies and how to make it through difficult times. We want him to continue his work for the next few decades and guide all of us, especially the young generation,” said Bhargava.
On the Start-up of the Year award, the jury spent a long time debating. Most members agreed that they were not too keen to give the award to a company that was just burning cash in the business-to-consumer category, chasing customers and revenue at the cost of profits. The preference was for innovative use of technology and original thinking and not copying an overseas model. In the absence of hard data, the jury relied on giving the award to a company which is doing something positive for the country as well. The jury finally chose Byju’s, a learning app that is bridging the gap in India’s education system. “The jury liked the fact that Byju’s is addressing a big problem in India – the breakdown of the education system, and it has come up with an innovative way of addressing it,” said Chandra.
On the selection of Star PSU, the jury felt that the candidate should show outstanding financial metrics apart from facing competition from the private sector effectively. After a discussion on several companies, they zeroed in on Bharat Petroleum. “We think BPCL has done a great job while competition in the sector is quite intense,” said Sinha.
For the Star MNC award, the jury debated a wide spectrum of multinationals but decided to restrict the universe to listed entities, as relevant data was not available on unlisted foreign companies. After much deliberation, the jury selected 3M India, an innovative company with a wide range of products being used in several industries. “3M has been a steady performer year on year and has built on its market position in India,” said Sinha.
When the jury came to the SME (small and medium enterprise) space, the discussion was on why many SMEs remained small for decades. Despite several government incentives and packages, SMEs are unable to grow – in terms of sales, profits, and market value. “We hope that the launch of the goods and services tax will change the SME space,” the jury said. The jury finally picked Sheela Foam, a Delhi-based company, which makes the “Sleepwell” brand of mattresses and was listed in November 2016 – just a few days after demonetisation.
Memani summed up the jury process, saying, “The analytical rigour at the jury meeting is always among the highest. This year, the names we chose are a mix of known organisations that have outperformed peers consistently for many years, as also new companies that have done well in recent years but are still to be recognised. My compliments to these champions of India Inc.”