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Mr S.K. Gupta, Director, JSW Steel Ltd, addressing a lecture organised by BL Club in Bangalore on Friday. - G.R.N. Somashekar

Bangalore March 23 The recent wave of acquisition of companies overseas by Indian corporates is a sign of the country realising its potential and become a strong economic power.

Dr S.K. Gupta, Director, JSW Steel Ltd, said that the recent wave of acquisitions of foreign companies had boosted confidence and signalled India's rise as an economic power.

He was delivering a lecture on mergers and acquisitions organised by the Business Line Club at the M.P. Birla Institute of Management on Friday.

Apart from its short-term gains of enhancing shareholder value, besides increasing the power and reach of a company in a different market, the intrinsic value of mergers and acquisitions is in preparing the India Inc to face competition with more confidence.

The country took some time to unshackle itself from historic weaknesses of being a colonial subject and constrains of inaccessibility to modern technology and chart its path towards its goal of becoming a developed country by 2015.

Dr Gupta said that mergers and acquisitions may at times be counter-productive to the goals of an acquirer.

But their gains in consolidating a hold through enlarging asset base, acquisition of technology - considered a weak link in the Indian business setup - could help corporates generate more wealth and provide many intangible advantages.

Citing the case of Tata Steel's acquisition of Corus, Dr Gupta said that the immediate negative market signals should not undermine the long-term benefits of both companies' inherent strengths, helping them to emerge as a strong global entity.

Earlier, welcoming Dr Gupta, Mr N. Rajashekar, Regional General Manager of The Hindu highlighted the unique features of Business Line. Dr N.S. Malavalli, Principal of the Institute, presided over the function.

More Stories on : Overseas Investments | Mergers & Acquisitions | Karnataka

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