India Inc gives thumbs up to Kejriwal

According to the chief executive officers, the new CM would abandon his 'confrontationist approach' towards corporates

Indian corporate leaders have welcomed the landslide victory of the Aam Aadmi Party (AAP) in New Delhi, saying the change will lead to good governance. According to the chief executive officers, the new chief minister would abandon his “confrontationist approach” towards corporates and make it easier for companies to do business in the capital city.

“It is a change that people of Delhi had voted for AAP. Kejriwal is a simple individual with good governance and clean governance,” said HDFC Chairman Deepak Parekh here on Tuesday.

The BSE Sensex recovered and closed 128 points up, at 28,355. The share price of Reliance Infrastructure, which supplies power to Delhi, closed flat at Rs 422 a share. The stock fell earlier as investors feared the new government might take action against the power companies. Shares of Mukesh Ambani’s Reliance Industries closed 1.6 per cent down at Rs 882.70 a share. Tata Power was up 1.7 per cent to Rs 81 on the BSE which closed in a positive note.

In his first term, which ended abruptly last year after 49 days of rule, Kejriwal had initiated a police probe against RIL in February 2014 on a gas price rise cleared by the then United Progressive Alliance government at the Centre. Reliance had termed the action “shocking” and denied any collusion in gas price increase. Kejriwal had asked the Centre to put it on hold but both the Congress and, later, the Bharatiya Janata Party (BJP) government cleared higher gas price for the company. During his election campaign, Kejriwal promised to bring down power rates in Delhi and special audits on power companies. Both Tata and Reliance Infra supply power to Delhi citizens. According to stock brokers, some investors are nervous at the AAP’s game plan for the power companies. “We have to wait and watch what is AAP’s policy towards these companies including Reliance Industries,” said a broker.

“I think what has impacted Delhi elections is that in the last seven-eight months nothing changed there when it was under the L-G (Lieutenant Governor) rule. It may have upset the people. Now he (Kejriwal) is promising cheaper power, access to water... we have to see how the AAP government is able to deliver,” Parekh said in an event here.

According to Mahindra group Chairman Anand Mahindra, a strong local government promising clean governance bodes well for the ease of doing business. “Hence, the rebounding of markets makes sense. So, the market seems to have recovered its composure and it’s recognition of the value of the democratic process,” he tweeted.

Chairman of consumer products major Marico, Harsh Mariwala, hoped the new chief minister would concentrate his energy on improving Delhi.

Sajjan Jindal, chairman of JSW Group, said the election results were ‘incredible’. “Even the world's best analysts would struggle to decode Indian elections. So complex, so edgy, so incredible, so Indian. Congrats Delhi,” he said. "Indian electorate is smart, unpredictable & yearning for change. AAP got it. Seems BJP was woken up with a bucket of ice water," he added.

Former CFO of Infosys Mohandas Pai was more forthcoming saying the middle class was unhappy with corruption and lack of basic civic services. “The revolt of the lower middle class and poor against corruption, bad governance, lack of water, power, transport, bad quality of life in Delhi, said Pai. 

Congratulating AAP, Chairperson of Biocon,  Kiran Mazumdar Shaw said AAP’s sweep was a result of steadfast belief in their electoral strategy.