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ISB announces top Indian transnational companies

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Indian companies — both private and government-owned enterprises — are becoming increasingly transnational, according to a survey by the (ISB), Hyderabad, and (Business School), Brazil. According to the Transnationality Ranking of Indian companies, the top five companies in the list have a (TNI) greater than 50 per cent. 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 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.

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