At a time when global corporate majors have started holding their board meetings or annual retreats in India to signal the arrival of the country on their scheme of things, fledgling telecom MNC Bharti Airtel is doing the opposite. Come August 3, Bharti will hold its board meeting in Africa at Nairobi, its headquarters in the continent. The agenda of the board meeting will be to take into account the company?s April-June earnings.
The selection of Nairobi for the board meeting is significant because the company will also be completing a year of the acquisition of Zain Telecom soon. It started giving combined earnings results from the first quarter of last fiscal. The board meeting will be followed by a wild life safari to mark the completion of one year of Airtel’s presence in Africa which it acquired for $10.7 billion.
The development is in line with what chairman and managing director Sunil Mittal had told FE in an interview after completing the Zain transaction in June 2010. He said the acquisition would re-start the India-Africa story, the age-old ties which were overtaken by China with the passage of time.
He had said that Africa is topical now and everybody is talking about it. There are opportunities there, like India started offering 10-15 years ago. Mittal had said that Bharti would act as a facilitator for other Indian companies to enter Africa and exploit the vast opportunities that lay there. While Bharti and Mittal are sure to re-invigorate the India-Africa story, the trend of Indian companies holding board meetings or other important brainstorming sessions at their overseas headquarters will only increase with time.
This is because increasingly Indian companies have expanded overseas so much so that bulk of their revenues have started coming from outside the country. Naturally, they too would signal the importance of their global headquarters to the people and markets of those nations. The vital statistics on this front is as follows: Around 65.6% of the total revenues of Bharat Forge, an auto ancillary major come from outside India. Similarly, after the acquisition of British car maker, Jaguar Land Rover (JLR), 59.2% of revenues of the $20 billion Tata Motors, India?s largest automobile company, has started pouring from overseas. Same is the case with another Tata group company, Tata Steel. Post acquisition of Anglo-Dutch steel maker, Corus, Thailand’s Millennium Steel and Singapore’s NatSteel, the group?s 73.5% revenues have started coming from outside the country.