By Alpesh Shah & Chaarvi Gupta
In the classic fairy tale, the evil queen famously asked, “Mirror, mirror on the wall, who’s the fairest of them all?” It’s a question that transcends fairy tales—echoed in classrooms, debated on sports fields, and whispered in boardrooms. Today, the corporate world asks a modern version of the same: Which ownership model is truly the best? The answer, backed by BCG’s deep dive into 500+ of India’s top companies (Nifty 500) and start-ups, is clear: there is no single winning model. Instead, context is everything, each ownership type—public sector undertakings (PSUs), family-run businesses, start-ups, institutional corporates, and multinational corporations (MNCs)—performs best when aligned with its sectoral environment.
Family businesses thrive in trust-driven sectors like real estate, healthcare, and mining, where legacy, long-term orientation, and deep local ties offer competitive advantage. PSUs dominate capital-intensive, policy-aligned sectors—energy, utilities, and banking—where scale and compliance trump speed. Institutional corporates lead in execution-heavy industries like information technology and communications, where governance discipline, execution rigour, and operational scalability are vital. Start-ups lead in consumer tech and fintech—fast-paced innovation-driven domains, but are nearly absent in regulated, infrastructure-heavy domains. MNCs excel in premium, brand-led categories like consumer goods, yet struggle in sectors demanding high policy sensitivity or local agility.
While India Inc is firing on all engines, one thing is clear—yesterday’s playbook will not work for tomorrow. India Inc must transform to secure India’s rightful global standing.
Reinventing legacy models
PSUs have seen a remarkable resurgence, with the Nifty PSE Index delivering 33% compound annual growth rate since 2020. Looking ahead, PSUs need to move from reforms to reinvention. To do so, they must modernise further: invest in leadership development, innovation capacity, and governance systems that allow speed, autonomy, and risk-taking. The next phase of PSU evolution needs more than policy push—it needs performance-led agility, innovation, and autonomy.
MNCs in India have long been hallmarks of brand strength, margin resilience, and capital discipline. consistently delivering high total shareholder return (TSR) and return on equity (RoE). Notably, the Indian arms of most MNCs enjoy significantly higher price-to-earnings multiples than their global parents, often two-three times. Yet, growth remains a weak spot, so much so that in many cases MNCs are ceding share. Success now hinges on India-first strategies—deeper localisation, faster innovation, unlocking white spaces, experimenting with alternative distribution and digital, and tapping emerging consumer aspirations in smaller towns. MNCs need to move from being premium play-focused to growth-focused local champions.
The strength of family run businesses lies in long-term capital commitment, continuity of vision, and deeprooted trust networks. However, global ambition requires a shift from intuitive to institutional—with better capital allocation discipline, professional boards, and globally capable leadership while retaining the entrepreneurial edge. This is not a choice between tradition and transformation, it’s about building bridges between them.
Building global benchmarks
Leading Indian institutional corporates have built strong reputations on consistent TSR, strong RoE, and industry leading governance. Whether it is digital finance, artificial intelligence, or supply chains, these segment leaders must move from exporting excellence to creating global benchmarks, from consistency to category leadership. With the right investments in R&D, intellectual property creation, and adjacent innovation, they have the potential to become global benchmarks not just in scale, but also influence.
Start-ups are reshaping India’s business landscape dramatically, redefining how Indians consume and transact. And they are increasingly global: 40% of seed-funded start-ups are now targeting international markets from day one, a clear example of India building for the world. Yet, breakneck growth must evolve into sustainable models—from speed to sustainability. Start-ups must now focus on governance, capital discipline, and anchor business models in unit economics and long-term viability—from unicorns of today to enduring champions of tomorrow.
India Inc is firing across ownership types: PSUs are modernising and competing, start-ups are building for the world, family firms are institutionalising, MNCs are deepening localisation, and institutional corporates are exporting excellence. Combined with India’s demographic dividend, digital infrastructure, capital market maturity, and vibrant entrepreneurial ecosystem, this creates a moment of global inflection. After decades of dominance by the West, and the surge of Japan and China in the 80s/90s and 2000s, India is emerging as the next corporate frontier. The number of Indian companies on Forbes’ Global 2000 has crossed 50, as many as China had in 2003 (today China has 350+) and the trajectory is only upward.
But unlocking this potential requires each ownership model to accelerate its evolution. MNCs must reinvent for relevance. Family businesses must scale with discipline. Start-ups must pivot from speed to sustainability. PSUs must shift from policy to performance. Institutional firms must lead in innovation and thought leadership. If each ownership model steps into its next evolutionary stage, then, by 2047, as India turns 100, it won’t just be participating in but reshaping the global corporate landscape. Because, the next era of global business dominance may not be about East or West. It might just be built in India.
The writers are respectively MD and senior partner, and project leader, BCG.
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