On 11th March 2018, Day 2 of Manthan 2018, Mr. Manas Datta delivered a guest lecture in our campus on the opportunities and challenges of mergers and acquisitions. He began his lecture by giving a brief overview of M&A and asked a few questions to the audience to understand their knowledge on the top as well.
Mr. Datta then showed some 2015 historical data points on M&A. About 52% of world’s M&A trade happens in USA and in India it’s just 1%. This shows the high competitive advantage USA possesses. He also showed Global M&A 2015 figures on relative performance by sector. The maximum M&A activity is happening in consumer products and technology. The least is in aerospace and defense.
He took the example of inbound and outbound data regarding M&A across the world. India amounts to approximately $8,911 million outbound and around $33497 million. India also clocked the highest M&A growth over a period of 5 years in 2016. India had an estimated M&A value of $48.5 billion in 2016 which was a huge increase from $27.7 billion on 2015. Mr. Datta then elaborated on the impact of geopolitical events on global M&A. Based on a survey by PE Outlook, the results showed that 41% of them believed in strategy M&A as the key driver of Global M&A, 26% believed in consolidation, 17% in attractive valuation and the rest on improved financial conditions.
Mr. Datta then focused on the visible global slowdown in M&A in 2018. The Q1 of FY 2018 showed a reduction in M&A activity across the world. Indian M&A declined from $15.8 billion in Q4 of FY 2017 to $6.8 billion in Q1 of FY 2018. These can be attributed to the Government policies across the world, changing market conditions and other external reasons. M&A according to him will definitely increase in healthcare industry in the future. That is a sector to watch out for. Pulling Rank by Baker McKenzie and Oxford Economics gives the ranking of a country based on its IPO and M&A activity. India ranks 33rd while Hong Kong is 1st and USA is 14th.
The motivations for M&A as an instrument for growth is critical but it is an iterative process. The key factors in achieving a successful M&A transaction are effective integration, economic certainty, accurate valuation, proper target identification, sound due diligence processes and stable regulatory and legislative environment. A way to refine M&A strategy is to map the business strategy to the M&A strategy, Setting target lists and Go/No-Go criteria, Aligning the executives and shareholders to the vision for the M&A strategy. A balance of these three results in an M&A success. He took a few questions from the audience bringing the curtains down on what has been a very informative and engrossing lecture. The audience was hooked throughout his lecture and gained valuable insights from him.
On day 1 of Manthan 2018, students had an interactive session with Mr. Vivek Law. Mr. Law is the founder, CEO, and editor-in-chief of The Money Mile. He is also Co-president of Keiretsu forum in Delhi-NCR and Bangalore. Mr. Law started off his career as a crime reporter and since then have worked with organizations such as TV Today Ltd, Bloomberg TV, CNBC-TV 18, Economic Times, Business Standard and Financial Express as Editor. He has a rich industrial experience of 23 years and his areas of expertise include, but are not limited to, financial literacy, investigating economic crime, consumer protection, and the stock market.
Mr. Law began the session by giving a brief introduction about himself and shared some insights from his life’s journey. After working for 12 years in newspaper, Mr. Law shifted his career to magazine work and joined India Today, where he tried more writing on finance. In 2004, he again shifted the career path, this time to television. In 2017, Mr. Law launched a digital video platform for finance, called The MoneyMile. The aim of the session was to create a basic idea among the students about the importance and need for investment. Mr. Law said that the investment habits of the ultra-rich in the country are totally in contrast with the habits of the rest of India. 93% of the ultra rich invests in equities in comparison to others, which is one of the reasons why the rich always stay rich. Investing is not about telling one not to spend. Mr. Law expressed his opinion that one should start investing when they have the luxury of money, which is right from the time they start earning. Mr. Law said that, if there’s one thing that can change someone’s life, it is the compounding power of money. Unless and until the investment is not getting the power of compounding, it’s impossible to create wealth.
In the second half of the session, Mr. Law talked about the importance of setting a goal before venturing into investment. He asked the students to put the goals down, such as child education or health or retirement and choose a scheme for investment with these goals in mind. Mr. Law is of the opinion that one need not invest in multiple schemes. It’s always safe to choose one particular scheme or at times, a few select schemes across categories for investment. Talking about the risks associated with investing in equities, Mr. Law said that no one knows what is going to happen in the stock market and charting can help only to an extent. The trend in India is that we buy equities when prices are high and disposes of when the price is low or when the market falls. When one goes into the stock market without realizing how much risk they can take, loss occurs.
On 3rd March, 2018, Ms. Archana Newaskar, Director-IT, IQVIA, engaged the students of TAPMI in an invigorating discussion on the scope and opportunities in the IT sector. She initiated the discussion by saying that the global IT industry is predominantly present in regions like United States of America and Asia Pacific followed by UK and other geographies of the world. “There is in fact”, she said “a global growth of 5% year on year in IT”. The crucial part of IT is managing workforce, working under senior management and being able to get the task done in time. Networking, experimenting, planning and transparency helps us in getting work done quickly and effectively. One of the key focus areas of coming year would be Cloud, Blockchain, Internet of Things, Automation, Artificial Intelligence, etc.
Talking about automation she explained that some of the highly susceptible areas of workforce replacement are domains of data processing and predictive analysis. Jobs like managing others and unpredictable physical work are difficult to be automated and therefore are less threatened by automation. Some barriers however, which automation faces infrastructure needs, organization size, technical feasibility, scarcity of skill, cost of workers, social acceptance and overall value proposition.
India is the leader in providing Offshore Business Services followed closely by China. Reasons for India being the leader are that we are demographically perfect to position our technical excellence and we make better geographical partners to international firms compared to other nearby countries. Various digital initiatives have been taken by the government like universal mobile phone connectivity, automation of delivery of government services, free wi-fi services in large cities, digital lockers and setting up fiber-optic network across the nation.
Talking about hiring in IT industry, the fueling of growth is majorly due to lack of skilled and competent workforce. Firms like people who are trained in soft skills, have an experience in emerging areas like IoT, AI, etc. and those who are competitive and energetic to bridge their skill gaps. Critical soft skills like teamwork, communication, integrity, conflict resolution, negotiation, leadership, adaptability and communication are very important in the IT industry.
Ending on a note that the IT industry provides bread and butter to a huge population she discussed the opportunities available in it such as those of an Analyst, Research Associate, Content Writer, HR Professional, Finance Professional, Project Manager, Consultant, Marketing & Sales Executive, Business Development Expert, etc. and mentioned how it provides exciting roles for management graduates.
Mr Tojo Joseph started the discussion with an introduction to the present-day scenario of start-ups. He said that ‘start-up’ is not a new concept. It has been there since time immemorial. People with entrepreneurial drive, business acumen, sellable idea and access to funding have built their own businesses. It is just the way of doing business and technical focus that has changed now. Earlier we focused on satisfying basic needs at a cheaper cost, while now with the advent of technology and greater disposable income at hand, these startups are focusing on improving lifestyles and adding elements of luxury. The products and services they provide are making our lives simpler and better.
He took the discussion forward by highlighting that start-ups are a growing trend these days. The benefits are provided in the form of higher employment, more technology and ease of life. Thus, they make our country more technologically developed and at par with the developed nations.
Going forward with the discussion, he discussed the HR policies that play a major role in a start-up culture. He talked about the recruitment policies, new and regular staff orientation, staff retention, attendance and leave policies and employee relations. He also threw some light on other factors influencing HR such as drug/alcohol abuse, personal debts, feedback and coaching, performance evaluation and termination policies. All these need to be carefully planned and monitored for a successful HR functionality.
Further, he spoke about employee satisfaction factors which play a major role in a start-up organization. Alignment of vision and mission, opportunity, rewards and recognition, the structure of organization, leadership and business competitiveness are some of the key focus areas.
Moving forward, he also talked about the process of managing complex change. Here, he highlighted certain factors change, confusion, anxiety, resistance, frustration and false starts that impact the key stakeholders of the organization. The HR function should be very strong to cope up with the change or any possible deviance.
Mr. Tojo Joseph ended the discussion by mentioning that start-up provides an all-around learning and development to an individual which improves his power of decision making and also provides experiential learning.
On 24th February 2018, Mr Sumit Kumar Neogi delivered a lecture on the topic, “Leadership for the New Millenium”, underlining the skills needed by a leader in a VUCA world. He opened the lecture by citing a story from his personal life, explaining the importance of dealing with uncertainty. “It is important to learn to be comfortable with constant change”, he said. He then took the examples of various leaders, from Jack Welch and Dhirubhai Ambani to Steve Jobs and Nelson Mandela, asking the students to identify the key leadership traits that they possessed. He highlighted the many facets of leadership, emphasizing the need to be flexible, innovative and focused.
There are various challenges that leaders face today in the face of the constant evolution of the business environment, he continued. The economy and geopolitical environment shape and influence the decisions that they take. Disruptions in technology and constant change require business leaders to keep themselves abreast of the latest trends emerging in the technology sphere. A broader perspective and wide-ranging knowledge are required, and silo-mentality is to be discarded, he underlined.
Recruiting and retaining top talent is becoming harder today, because of the many opportunities available to in-demand professionals. He asked the young leaders in the audience to imbibe a growth mindset when they step out into the corporate world, by looking at long-term goals rather than short-term ones.
He exhorted the students to demonstrate effective leadership by learning from mistakes and displaying agility. Petty politics shouldn’t be encouraged in the workplace, he stated, asking the students to present their own authentic selves during work. “Move from headship to leadership”, he said, emphasizing the importance of looking beyond the title. He also highlighted the importance of being an influencer by expanding one’s personal network.
He then spoke about his journey at Cipla Ltd., highlighting the milestones and market shaping initiatives that the company had achieved in the healthcare space. He ended the lecture by exhorting the students to be changemakers, quoting Henry Ford – “Don’t find fault, find a remedy”.