industries indian companies foreign companies -...
TRANSCRIPT
45
Chapter third consists of company profile of selected sample of Indian and foreign
companies from five different industries. Further in this chapter the researcher
outlined the need of the study, objectives of the study, research methodology followed
during the research work. The researcher winds up the chapter with few limitation of
the study. Table no: 3.0 Sample Companies
Industries Indian Companies Foreign Companies
1. Banking State Bank of India,
ICICI Bank Limited
HSBC Bank USA,
American Express
2. Insurance Life Insurance
Corporation of India,
Bajaj Allianz Life
Insurance Company
Limited
American International
Group, Inc.,
Met Life, Inc.
3. Telecommunication Bharat Sanchar Nigam
Limited,
Bharti Airtel Limited
Vodafone Group Plc.,
Virgin Media Inc.
4. Petroleum Bharat Petroleum
Corporation Limited
Hindustan Petroleum
Corporation Limited
Exxon Mobil,
Royal Dutch Shell Plc.
5. Automobile Tata Motors Limited,
Maruti Suzuki India
Limited
Toyota Motors
Corporation,
Hyundai Motor Company
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3.0 COMPANY PROFILE OF INDIAN BANKING COMPANIES
Table No: 3.1
“State Bank of India SBI is a multinational banking and financial services company
based in India. It is a government owned corporation with its headquarters in Mumbai
Maharashtra
State Bank of India
Type Public
Traded as NSE SBIN
BSE 500112
LSE SBID
BSE SENSEX Constituent
Industry Banking financial services
Founded 1 July 1955
Headquarters Mumbai Maharashtra India
Area served Worldwide
Key people Pratip Chaudhuri (Chairman)
Products Credit cards consumer banking corporate banking
finance and insurance, investment banking
mortgage loans private banking wealth
management
Revenue US$ 36.950 billion (2011)
Profit US$ 3.202 billion (2011)
Total assets US$ 359.237 billion (2011)
Total equity US$ 20.854 billion (2011)
Owner(s) Government of India
Employees 292,215 (2012)
Website www.sbi.co.in
47
As of December 2012 it had assets of US$501 billion and 15,003 branches including
157 foreign offices making it the largest banking and financial services company in
India by assets. The bank traces its ancestry to British India through the Imperial
Bank of India to the founding in 1806 of the Bank of Calcutta making it the oldest
commercial bank in the Indian Subcontinent. Bank of Madras merged into the other
two presidencies banks Bank of Calcutta and Bank of Bombay to form the Imperial
Bank of India which in turn became the State Bank of India. Government of India
nationalized the Imperial Bank of India in 1955 with Reserve Bank of India taking a
60% stake and renamed it the State Bank of India. In 2008 the government took over
the stake held by the Reserve Bank of India. SBI was ranked 285th in the Fortune
Global 500 rankings of the world's biggest corporations for the year 2012. SBI
provides a range of banking products through its network of branches in India and
overseas including products aimed at non resident Indians NRIs. SBI has 14 regional
hubs and 57 Zonal Offices that are located at important cities throughout the country.
SBI is a regional banking behemoth and has 20% market share in deposits and loans
among Indian commercial banks. The State Bank of India was named the 29th most
reputed company in the world according to Forbes 2009 rankings and was the only
bank featured in the top 10 brands of India list in an annual survey conducted by
Brand Finance and The Economic Times in 2010” (en.wikipedia.org).
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Table No: 3.2
“ICICI Bank Limited NSE ICICIBANK BSE 532174 NYSE IBN is a multinational
financial services company headquartered in Mumbai India. It is the second largest
bank in India by assets and third largest by market capitalization
Type Private
Traded as BSE 532174
NSE ICICIBANK
NYSE IBN
BSE SENSEX Constituent
Industry Banking Financial services
Founded 1954
Headquarters Mumbai Maharashtra India
Area served Worldwide
Key people Ms.Chanda Kochhar MD & CEO
Products Credit cards Consumer banking corporate banking finance and
insurance investment banking mortgage loans private banking
wealth management
Revenue US$ 13.52 billion (2012)
Operating
income
US$ 2.117 billion (2012)
Profit US$ 1.597 billion (2012)
Total assets US$ 98.99 billion (2012)
Total equity US$ 12.62 billion (2012)
Employees 81,254 (2012)
Website www.icicibank.com
It offers a wide range of banking products and financial services to corporate and
retail customers through a variety of delivery channels and through its specialized
subsidiaries in the areas of investment banking life and nonlife insurance venture
capital and asset management. The Bank has a network of 3,350 branches and 10,486
ATM in India and has a presence in 19 countries including India. The bank has
subsidiaries in the United Kingdom Russia and Canada branches in United States
Singapore Bahrain Hong Kong Sri Lanka Qatar and Dubai International Finance
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Centre and representative offices in United Arab Emirates China South Africa
Bangladesh Thailand Malaysia and Indonesia. The company UK subsidiary has
established branches in Belgium and Germany. ICICI Bank is one of the Big Four
banks of India along with State Bank of India Punjab National Bank and Canara
Bank” (en.wikipedia.org).
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3.1 COMPANY PROFILE OF INDIAN INSURANCE COMPANIES
Table No: 3.3
“Life Insurance Corporation of India LIC is the largest insurance group and
investment company in India
Life Insurance Corporation of India
Type State owned
Industry Financial services
Founded 1 September 1956
Headquarters Mumbai India
Key people S K Roy(West) Rahul Grewal(North) N R Guha(East) Debashish
Sen(South) Zonal Managing Director
Products Life and health insurance investment management mutual fund
Total assets 1,325,000 crore (US$220 billion) (2010)
Owner(s) Government of India
Employees 115,966 (2010)
Subsidiaries LIC Housing Finance
LIC Pension Fund Ltd.
LIC International
LIC Cards Services
LIC Nomura Mutual Fund
Website www.licindia.in
Its a state-owned company where Government of India has 100%stake. It has assets
estimated of 1,325,000 crore US$220 billion It was founded in 1956 with the merger
of 245 insurance companies and provident societies 154 life insurance companies 16
foreign companies & 75 provident companies. Headquartered in Mumbai financial
and commercial capital of India the Life Insurance Corporation of India currently has
8 zonal Offices and 113 divisional offices located in different parts of India around
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3500 servicing offices including 2048 branches 54 Customer Zones 25 Metro Area
Service Hubs and a number of Satellite Offices located in different cities and towns of
India and has a network of 13,37,064 individual agents 242 Corporate Agents 79
Referral Agents, 98 Brokers and 42 Banks as on 31.3.2011 for soliciting life insurance
business from the public. The slogan of LIC is Yogakshemam Vahamyaham which
translates from Sanskrit to Your welfare is our responsibility. The slogan is derived
from the Ancient Hindu text the Bhagavad Gita 9th Chapter 22nd verse. The literal
translation from Sanskrit to English is I carry what you require. The slogan can be
seen in the logo written in Devanagiri script” (en.wikipedia.org).
Table No: 3.4
“Bajaj Allianz Life Insurance Company Limited is a joint venture between Bajaj
Finserv Limited recently demerged from Bajaj Auto Limited and Allianz SE
Bajaj Allianz Life Insurance Company Limited
Type Public Listed Company
Industry Insurance
Founded 2001
Headquarters India
Area served Worldwide
Key people Varghese Philip CEO
Website BajajAllianz.com
Bajaj Allianz Life Insurance offers a range of insurance products for financial
planning and life insurance” (www.greenworldinvestor.com).
52
3.2 COMPANY PROFILE OF INDIAN TELECOMMUNICATION
COMPANIES
Table No: 3.5
“Bharat Sanchar Nigam Limited abbreviated BSNL is an Indian state owned
telecommunications company headquartered in New Delhi India
Type State owned enterprise
Industry Telecommunications
Founded incorporated 15 September 2000 with effect from 1st October
2000
Headquarters New Delhi India
Key people R.K. Upadhyay (Chairman & MD)
Products Fixed line and mobile telephony Internet services digital television
IPTV
Revenue 279.33 billion (US$4.7 billion) (2011-12)
Net income -88.51 billion (US$−1.5 billion) (2011–12)
Total assets 1,176.32 billion (US$20 billion) (2011–12)
Owner(s) Government of India
Employees 254,499 (as on 27 February 2013)
Website www.bsnl.co.in
It was incorporated on 15 September 2000. It took over the business of providing of
telecom services and network management from the erstwhile Central Government
Departments of Telecom Services DTS and Telecom Operations DTO, with effect
from 1 October 2000 on going concern basis. It is the largest provider of fixed
telephony and fourth largest mobile telephony provider in India and is also a provider
of broadband services. However in recent years the company revenue and market
share plunged into heavy losses due to intense competition in the Indian
telecommunications sector. BSNL is India oldest and largest communication service
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provider CSP. It had a customer base of 95 million as of June 2011. It has footprints
throughout India except for the metropolitan cities of Mumbai and New Delhi which
are managed by Mahanagar Telephone Nigam MTNL” (en.wikipedia.org).
54
Table No: 3.6
“Bharti Airtel Limited, commonly known as Airtel is an Indian multinational
telecommunications Services Company headquartered in New Delhi India
Bharti Airtel Limited
Type Public
Traded as BSE 532454 NSE BHARTIARTL
BSE SENSEX Constituent
Industry Telecommunications
Founded New Delhi NCT India
Founder(s) Sunil Bharti Mittal
Headquarters New Delhi NCT India
Area served South Asia Africa and the Channel Islands
Key people Sunil Bharti Mittal Chairman and MD
Products Fixed line and mobile telephony broadband and fixed-line internet
services digital television and IPTV
Revenue 419.31 billion (2012)
Operating
income
137.58 billion (2012)
Profit 53,700 million (2012)
Total assets 635.59 billion (2012)
Total equity 18.98 billion (2012)
Employees 21,299 (2012)
Parent Bharti Enterprises 52.7%
SingTel 15.57%
Vodafone 4.4%
Subsidiaries Airtel Africa Airtel Digital TV Airtel Sri Lanka Airtel Bangladesh
Website www.airtel.com
It operates in 20 countries across South Asia Africa and the Channel Islands. Airtel
has GSM network in all countries in which it operates providing 2G 3G and 4G
services depending upon the country of operation. Airtel is the world third largest
mobile telecommunications company with over 261 million subscribers across 150
countries as of August 2012. It is the largest cellular service provider in India with
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190.91 million subscribers as of June 2013. Airtel is the third largest in country
mobile operator by subscriber base behind China Mobile and China Unicom. Airtel is
the largest provider of mobile telephony and second largest provider of fixed
telephony in India and is also a provider of broadband and subscription television
services. It offers its telecom services under the airtel brand, and is headed by Sunil
Bharti Mittal Bharti Airtel is the first Indian telecom service provider to achieve Cisco
Gold Certification. It also acts as a carrier for national and international long distance
communication services. The company has a submarine cable landing station at
Chennai which connects the submarine cable connecting Chennai and Singapore”
(en.wikipedia.org).
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3.3 COMPANY PROFILE OF INDIAN PETROLEUM
COMPANIES
Table No: 3.7
“Bharat Petroleum Corporation Limited BPCL is an Indian state controlled oil and gas
company headquartered in Mumbai Maharashtra
Bharat Petroleum Corporation Limited
Type Public
Traded as BSE 500547
NSE BPCL
Industry Oil and gas
Headquarters Mumbai Maharashtra India
Key people R K Singh Chairman & MD
Products Petroleum natural gas and other petrochemicals
Revenue US$ 39.45 billion (2012)
Operating
income
US$ 777 million (2012)
Net income US$ 900 million (2012)
Total assets US$ 14.47 billion (2012)
Total equity US$ 3.14 billion (2012)
Owner(s) Government of India
57
Employees 14,154 (2012)
Website www.bharatpetroleum.com
BPCL has been ranked 225th in the Fortune Global 500 rankings of the world biggest
corporations for the year 2012. In 1989 during vast industrial development an
important player in the South Asian market was the Burmah Oil Company. Though
incorporated in Scotland in 1886 the company grew out of the enterprises of the Chef
Rohit Oil Company which had been formed in 1871 to refine crude oil produced from
primitive hand dug wells in Upper Burma. In 1928, Asiatic Petroleum Company India
started cooperation with Burma Oil Company. This alliance led to the formation of
Burmah Shell Oil Storage and Distributing Company of India Limited. Burmah Shell
began its operations with import and marketing of Kerosene. On 24 January 1976 the
Burmah Shell was taken over by the Government of India to form Bharat Refineries
Limited. On 1 August 1977 it was renamed Bharat Petroleum Corporation Limited. It
was also the first refinery to process newly found indigenous crude Bombay High.In
2003 following a petition by the Centre for Public Interest Litigation the Supreme
Court restrained the Central government from privatizing Hindustan Petroleum and
Bharat Petroleum without the approval of Parliament. As counsel for the CPIL
Rajinder Sachar and Prashant Bhushan said that the only way to disinvest in the
companies would be to repeal or amend the Acts by which they were nationalized in
the 1970s. As a result the government would need a majority in both houses to push
through any privatization” (en.wikipedia.org).
58
Table No: 3.8
“Hindustan Petroleum Corporation Limited HPCL BSE 500104 NSE HINDPETRO is an
Indian state owned oil and natural gas company with its headquarters at Mumbai
Maharashtra and with Navratna status
Hindustan Petroleum Corporation Limited
Type Public
Traded as BSE 500104 NSE HINDPETRO
Industry Oil and Gas
Founded 1974
Headquarters Mumbai Maharashtra India
Key people S Roy Choudhury Chairman & MD
Products Oil natural gas petroleum lubricant petrochemical
Revenue US$ 34.44 billion (2012)
Operating
income
US$ 670 million (2012)
Net income US$ 32.5 million (2012)
Total assets US$ 15.91 billion (2012)
Total equity US$ 2.46 billion (2012)
Owner(s) Government of India
Employees 11,226 (2012)
Website www.hindustanpetroleum.com
HPCL has been ranked 267th in the Fortune Global 500 rankings of the world biggest
corporations and 4th among India Companies for the year 2012. HPCL has about 20%
marketing share in India among PSUs and a strong marketing infrastructure. The
President of India owns 51.11% shares in HPCL. HPCL was incorporated in 1974
after the takeover and merger of Erstwhile Esso Standard and Lube India Limited by
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the Esso Aquisition of Undertakings in India Act 1974. Caltex Oil Refining India Ltd
CORIL was taken over by Govt. of India. in 1976 and merged with HPCL in 1978 by
the CORIL HPCL Amalgamation Order 1978. Kosan Gas Company was merged with
HPCL in 1979 by the Kosangas Company Aquisition Act 1979. In 2003 following a
petition by the Centre for Public Interest Litigation CPIL the Supreme Court of India
restrained the Central government from privatizing Hindustan Petroleum and Bharat
Petroleum without the approval of Parliament. As counsel for the CPIL Rajinder
Sachar and Prashant Bhushan said that the only way to disinvest in the companies
would be to repeal or amend the Acts by which they were nationalized in the 1970s.
As a result the government would need a majority in both houses to push through any
privatization. HPCL has been steadily growing over the years. The refining capacity
steadily increased from 5.5 million metric tonnes in 1984 85 to 14.80 million metric
tonnes MMT as of March 2013. On the financial front the Net income form Sales
operations grew from IN 2687 crores in 1984-85 to IN 2,06,529 Crores in Financial
year 2012-13. During FY 2012-13 its net profit was IN 904 Crores”
(en.wikipedia.org).
60
3.4 COMPANY PROFILE OF INDIAN AUTOMOBILE
COMPANIES
Table No: 3.9
“Tata Motors Limited formerly TELCO is an Indian multinational automotive
manufacturing company headquartered in Mumbai Maharashtra India and a
subsidiary of the Tata Group. Its products include passenger cars trucks vans coaches
buses and military vehicles
Tata Motors Limited
Type Public
Traded as BSE 500570 BSE SENSEX Constituent NSE TATAMOTORS
NYSE TTM
Industry Automotive
Founded 1945
Founder(s) J. R. D. Tata
Headquarters Mumbai Maharashtra India
Area served Worldwide
Key people Ratan Tata (Chairman Emeritus) Cyrus Pallonji Mistry
(Chairman) Karl Slym (Managing Director) Ravi Kant
Products Automobiles Commercial vehicles Automotive parts
Services Vehicle leasing Vehicle service
Revenue US$ 32.67 billion (2012)
Operating
income
US$ 3.06 billion (2012)
Profit US$ 2.28 billion (2012)
Total assets US$ 28.05 billion (2012)
Total equity US$ 6.44 billion (2012)
Employees 59,759 (2012)
Parent Tata Group
Divisions Tata Motors Cars
Subsidiaries Jaguar Land Rover Tata Daewoo Tata Hispano
Website www.tatamotors.com
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It is the world eighteenth largest motor vehicle manufacturing company fourth largest
truck manufacturer and second largest bus manufacturer by volume. Tata Motors has
auto manufacturing and assembly plants in Jamshedpur Pantnagarb Lucknow Sanand
Dharwad and Pune in India as well as in Argentina South Africa Thailand and the
United Kingdom. It has research and development centres in Pune Jamshedpur
Lucknow and Dharwad India and in South Korea Spain and the United Kingdom. It
has a bus manufacturing joint venture with Marcopolo S.A. Tata Marcopolo and a
construction equipment manufacturing joint venture with Hitachi Telcon Construction
Solutions. Founded in 1945 as a manufacturer of locomotives the company
manufactured its first commercial vehicle in 1954 in a collaboration with Daimler
Benz AG which ended in 1969. Tata Motors entered the passenger vehicle market in
1991 with the launch of the Tata Sierra and in 1998 launched the first fully indigenous
Indian passenger car the Indica. Tata Motors acquired the South Korean truck
manufacturer Daewoo Commercial Vehicles Company in 2004 and the British
premium car maker Jaguar Land Rover in 2008. Tata Motors is listed on the Bombay
Stock Exchange where it is a constituent of the BSE SENSEX index the National
Stock Exchange of India and the New York Stock Exchange. Tata Motors is ranked
314th in the 2012 Fortune Global 500 ranking of the world biggest corporations”
(en.wikipedia.org).
62
Table No: 3.10
“Maruti Suzuki India Limited commonly referred to as Maruti and formerly known as
Maruti Udyog Limited is an automobile manufacturer in India
Maruti Suzuki India Limited
Type Public
Traded as BSE 532500 NSE MARUTI BSE SENSEX Constituent
Industry Automotive
Predecessor(s) Maruti Udyog Limited
Founded 1981
Headquarters New Delhi India
Key people RC Bhargava (Chairman) Kenichi Ayukawa (CEO & MD)
Products Automobiles
Revenue 369.34 billion (US$6.2 billion) (2012)
Net income 16.81 billion (US$280 million) (2012)
Employees 6,903 (2011)
Parent Suzuki
Website www.marutisuzuki.com
It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki. As of
November 2012 it had a market share of 37% of the Indian passenger car market.
Maruti Suzuki manufactures and sells a complete range of cars from the entry level
Alto to hatchback Ritz A-Star Swift Wagon R Zen and sedans DZire Kizashi and SX4
in the segment Eeco Omni Multi Purpose vehicle Suzuki Ertiga and Sports Utility
vehicle Grand Vitara. The company's headquarters are on Nelson Mandela Road New
Delhi. In February 2012 the company sold its ten millionth vehicle in India.
Originally 18.28% of the company was owned by the Indian government and 54.2%
by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of
the company in June 2003. As of May 2007, the government of India sold its
complete share to Indian financial institutions and no longer has any stake in Maruti
Udyog. Maruti Udyog Limited MUL was established in February 1981 though the
actual production commenced in 1983 with the Maruti 800 based on the Suzuki Alto
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kei car which at the time was the only modern car available in India its only
competitors the Hindustan Ambassador and Premier Padmini were both around 25
years out of date at that point. Through 2004 Maruti Suzuki has produced over 5
Million vehicles. Maruti Suzukis are sold in India and various several other countries
depending upon export orders. Models similar to those made by Maruti in India albeit
not assembled or fully manufactured in India or Japan are sold by Pak Suzuki Motors
in Pakistan. The company exports more than 50,000 cars annually and has domestic
sales of 730,000 cars annually. Its manufacturing facilities are located at two facilities
Gurgaon and Manesar in Haryana south of Delhi. Maruti Suzuki Gurgaon facility has
an installed capacity of 900,000 units per annum. The Manesar facilities, launched in
February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per
year and a Diesel Engine plant with an annual capacity of 100,000 engines and
transmissions. Manesar and Gurgaon facilities have a combined capability to produce
over 14,50,000 units annually. About 35% of all cars sold in India are made by
Maruti. The company is 54.2% owned by the Japanese multinational Suzuki Motor
Corporation per cent of Maruti Suzuki. The rest is owned by public and financial
institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange
of India. During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024
were exported. In all over six million Maruti Suzuki cars are on Indian roads since the
first car was rolled out on 14 December 1983. Maruti Suzuki offers 15 models, Maruti
800 Alto Maruti Alto 800 WagonR Estilo A-star Ritz Swift Swift DZire SX4 Omni
Eeco Gypsy Grand Vitara Kizashi and the newly launched Ertiga. Swift Swift DZire,
A-star and SX4 are manufactured in Manesa Grand Vitara and Kizashi are imported
from Japan as completely built units CBU remaining all models are manufactured in
Maruti Suzuki Gurgaon Plant. The company is believed to be moving towards
introduction of a new version of Maruti 800 by November 2012 which will be more
fuel efficient though slightly costlier than Alto and existing Maruti 800. The Suzuki
Motor Corporation, Maruti main stakeholder is a global leader in mini and compact
cars for three decades. Suzuki’s strategy is to utillise light-weight compact engines
with stronger power fuel-efficiency and performance capabilities. Nearly 75,000
people are employed directly by Maruti Suzuki and its partners. It has been rated first
in customer satisfaction among all car makers in India from 1999 to 2009 by J D
Power Asia Pacific. Maruti Suzuki will be introducing new 800 cc model by Diwali in
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2012.The model is supposed to be fuel efficient hence more expensive”
(en.wikipedia.org).
65
3.5 COMPANY PROFILE OF FOREIGN BANKING COMPANIES
Table No: 3.11
“HSBC Bank USA National Association an American subsidiary of UK based
HSBC Bank USA N.A. HSBC USA Inc.
Type Subsidiary of HSBC Holdings plc
Industry Finance and Insurance
Founded 1850 as Marine Midland Bank
Headquarters New York NY USA
Key people Brendan McDonagh (Chairman)
Irene Dorner (President and CEO)
Products Financial Services
Employees 43,000 (including HSBC Finance Corporation)
Parent HSBC
Website www.us.hsbc.com
HSBC Holdings plc is a bank with its operational head office in New York City and
its nominal head office in McLean, Virginia as designated on its charter. HSBC Bank
USA N.A. is a national bank chartered under the National Bank Act which means that
it is regulated by the Office of the Comptroller of the Currency OCC a part of the U.S.
Department of the Treasury” (en.wikipedia.org).
66
Table No: 3.12
“American Express Company also known as AmEx is an American multinational
financial services corporation
American Express Company
Type Public
Traded as NYSE AXP
Dow Jones Industrial Average Component
S&P 500 Component
Industry Banking Financial services
Predecessor(s) Livingston Fargo & Company
Wells Butterfield & Company
Wells & Company
Founded Buffalo, New York, United States 1850
Headquarters Three World Financial Center,
New York City New York U.S.
Area served Worldwide
Key people Kenneth Chenault (Chairman & CEO)
Products Charge card credit cards traveler cheque
Services Finance insurance travel
Revenue US$ 33.80 billion (2012)
Operating
income
US$ 6.451 billion (2012)
Net income US$ 4.482 billion (2012)
Total assets US$ 153.00 billion (2012)
Total equity US$ 19.00 billion (2012)
Employees 63,600 (2012)
Website AmericanExpress.com
67
Headquartered in three World Financial Center Manhattan New York City New York
United States. Founded in 1850 it is one of the 30 components of the Dow Jones
Industrial Average. The company is best known for its credit card charge card and
traveler cheque businesses. Amex cards account for approximately 24% of the total
dollar volume of credit card transactions in the US. Business Week and Interbrand
ranked American Express as the 22nd most valuable brand in the world estimating the
brand to be worth US$14.97 billion. Fortune listed Amex as one of the top 20 Most
Admired Companies in the World” (wikipediamaze.com).
68
3.6 COMPANY PROFILE OF FOREIGN INSURANCE
COMPANIES
Table No: 3.13
“American International Group Inc. also known as AIG is a multinational insurance
corporation with over 63,000 employees globally
American International Group, Inc.
Type Public
Traded as NYSE AIG
S&P 500 Component
Industry Insurance Financial services
Founded Shanghai China 1919
Founder(s) Cornelius Vander Starr
Headquarters New York New York U.S.
Area served Worldwide
Key people Bob Benmosche President & CEO Steve Miller Chairman
Products Insurance Property Casualty Commercial & Consumer Life &
Retirement Mortgage Insurance Aircraft Leasing
Revenue US$ 65,656 million (2012)
Operating
income
US$ 6,635 million (2012)
Net income US$ 3,438 million (2012)
Total assets US$ 548,633 million (2012)
Total equity US$ 98,669 million (2012)
Employees Approximately 63,000 (2012)
Website AIG.com
AIG companies serve customers in more than 130 countries around the world the
company is a provider of property casualty insurance life insurance and retirement
services and mortgage insurance. AIG corporate headquarters are in New York City
its British headquarters are in London continental Europe operations are based in La
69
Défense Paris and its Asian headquarters are in Hong Kong. According to the 2013
Forbes Global 2000 list AIG was the 62nd-largest public company in the world. As of
April 21, 2013 it had a market capitalization of $57.53 billion” (en.wikipedia.org).
Table No: 3.14
“MetLife Inc. is the holding corporation for the Metropolitan Life Insurance Company
or MetLife for short and its affiliates
MetLife, Inc.
Type Public
Traded as NYSE MET
S&P 500 Component
Industry Financial services
Founded 1868
Headquarters 1095 Avenue of the Americas
New York City New York U.S.
Key people Steven A. Kandarian President, Chairman, and CEO
Products Insurance Annuities Employee Benefits Banking
Revenue US$ 52.717 billion (2010)
Operating
income
US$ 3.958 billion (2010)
Net income US$ 2.786 billion (2010)
Total assets US$ 730.906 billion (2010)
Total equity US$ 48.996 billion (2010)
Employees 66,000 (2010)
Website MetLife.com
MetLife is among the largest global providers of insurance annuities and employee
benefit programs with 90 million customers in over 60 countries. The firm was
founded on March 24, 1868. On January 6,1915 MetLife completed
the mutualization process changing from a stock life insurance company owned by
individuals to a mutual company operating without external shareholders and for the
benefit of policyholders. The company went public in 2000. Through its subsidiaries
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and affiliates MetLife holds leading market positions in the United States Japan Latin
America Asia Pacific region Europe and the Middle East. MetLife is the largest life
insurer in the United States and serves 90 of the largest Fortune 500 companies. The
company principal offices are located at 1095 Avenue of the Americas in Midtown
Manhattan New York City though it retains some executive offices and its boardroom
in the MetLife Building located at 200 Park Avenue New York City which it sold in
2005” (en.wikipedia.org).
71
3.7 COMPANY PROFILE OF FOREIGN
TELECOMMUNICATION COMPANIES
Table No: 3.15
“Vodafone Group plc is a British multinational telecommunications company
headquartered in London and with its registered office in Newbury Berkshire
Vodafone Group plc
The Vodafone speech mark logo in use since 1997
Type Public limited company
Traded as LSE VOD NASDAQ VOD
Industry Telecommunications
Predecessor(s) Racal Telecom (1983 to 1991)
Founded 1991 Newbury, Berkshire, United Kingdom
Headquarters London, United Kingdom (Head office)
Newbury, Berkshire, United Kingdom (Registered office)
Area served Worldwide
Key people Gerard Kleisterlee (Chairman), Vittorio Colao (CEO)
Products Fixed line and mobile telephony Internet services digital television
Revenue £46.417 billion (2012)
Operating
income
£11.187 billion (2012)
Profit £6.957 billion (2012)
Total assets £139.57 billion (2012)
Total equity £76.935 billion (2012)
Employees 86,373 (2012)
Divisions Vodafone Global Enterprise
Website www.vodafone.com
72
It is the world second-largest mobile telecommunications company measured by both
subscribers and 2011 revenues in each case behind China Mobile and had 439 million
subscribers as of December 2011. Vodafone owns and operates networks in over 30
countries and has partner networks in over 40 additional countries. Its Vodafone
Global Enterprise division provides telecommunications and IT services to corporate
clients in over 65 countries. Vodafone also owns 45% of Verizon Wireless the largest
mobile telecommunications company in the United States measured by subscribers.
Vodafone has a primary listing on the London Stock Exchange and is a constituent of
the FTSE 100 Index. It had a market capitalization of approximately £89.1 billion as
of 6 July 2012 the third-largest of any company listed on the London Stock Exchange
It has a secondary listing on NASDAQ” (en.wikipedia.org).
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Table No: 3.16
“Virgin Media Inc. is a company which provides fixed and mobile telephone
television and broadband internet services to businesses and consumers in the United
Kingdom
Virgin Media Inc.
Type Subsidiary of Liberty Global
Industry Telecommunications
Media
Founded 6 March 2006
Headquarters New York City New York, United States (Executive office)
Hook Hampshire England United Kingdom
(Operational headquarters)
Area served United Kingdom
Key people James Mooney (Chairman), Tom Mockridge (CEO)
Products Digital television, Broadband Internet, Fixed-line Telephone
Mobile Telephony
Revenue £3.991 billion (2011)
Operating
income
£75 million (2011)
Total assets £7.938 billion (2011)
Owner(s) Liberty Global
Employees 11,450 (2011)
Subsidiaries Virgin Media Business Virgin Mobile UK
Website www.virginmedia.com
Its executive office is in New York City United States and its operational
headquarters are in Hook United Kingdom. The company has been a subsidiary of
Liberty Global since June 2013. The company was formed in March 2006 by the
merger of NTL and Telewest which created NTL Telewest. A further merger with
Virgin Mobile UK in July 2006 created the first quadruple-play media company in the
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United Kingdom offering television internet mobile phone and fixed line telephone
services. All of the company consumer services were rebranded under the Virgin
Media name in February 2007. Virgin Media owns and operates its own fibre optic
cable network the only national cable network in the United Kingdom. As of 31
December 2011 it had a total of approximately 4.8 million cable customers of whom
around 3.76 million were supplied with its television services Virgin TV around 4
million with broadband internet services and around 4.2 million with fixed-line
telephony services. At the same date it had around 3 million mobile telephony
customers. Virgin Media competes primarily with BSkyB BT Group EE O2 Talk Talk
and Vodafone. Virgin Media previously had a primary listing on the NASDAQ Stock
Market and was a constituent of the NASDAQ 100 index. It also had a secondary
listing on the London Stock Exchange” (en.wikipedia.org)
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3.8 COMPANY PROFILE OF FOREIGN PETROLEUM
COMPANIES
Table No: 3.17
“Exxon Mobil Corporation or ExxonMobil is an American multinational oil and gas
corporation headquartered in Irving Texas United States
Exxon Mobil Corporation
Type Public
Traded as NYSE XOM
Dow Jones Industrial Average Component
S&P 500 Component
Industry Oil and gas
Predecessor(s) Exxon Mobil
Founded November 30, 1999
Headquarters Irving Texas United States
Area served Worldwide
Key people Rex W. Tillerson (Chairman and CEO)
Products Fuels, lubricants, petrochemicals
Revenue US$ 467.285 billion (2012)
Operating
income
US$ 64.043 billion (2012)
Net income US$ 44.880 billion (2012)
Total assets US$ 333.795 billion (2012)
Total equity US$ 165.863 billion (2012)
Employees 76,900 (2012)
Subsidiaries Aera Energy Esso Esso Australia Exxon Exxon Neftegas Imperial
Oil (69,6%) Mobil, Mobil Producing Nigeria SeaRiver Maritime
Superior Oil Company Vacuum Oil Company XTO Energy
Website ExxonMobil.com
It is a direct descendant of John D. Rockefeller Standard Oil company and was
formed on November 30, 1999 by the merger of Exxon and Mobil formerly Standard
Oil of New York and Standard Oil of New Jersey It is affiliated with Imperial Oil
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which operates in Canada. ExxonMobil is the world largest company by revenue and
in 2013 became the largest publicly traded company by market capitalization in the
world. The company is ranked 5 globally in Forbes Global 2000 list in 2013. Exxon
Mobil reserves were 72 billion oil equivalent barrels at the end of 2007 and at then
2007 rates of production are expected to last over 14 years. With 37 oil refineries in
21 countries constituting a combined daily refining capacity of 6.3 million barrels
1,000,000 m Exxon Mobil is the largest refiner in the world a title that was also
associated with Standard Oil since its incorporation in 1870. ExxonMobil is the
largest of the world supermajors with daily production of 3.921 million BOE barrels
of oil equivalent. In 2008 this was approximately 3% of world production which is
less than several of the largest state-owned petroleum companies. When ranked by oil
and gas reserves it is 14th in the world with less than 1% of the total. A 2012 review
of Steve Coll book Private Empire ExxonMobil and American Power in The Daily
Telegraph says that ExxonMobil has grown into one of the planet most hated
corporations able to determine American foreign policy and the fate of entire nations
In terms of its environmental record ExxonMobil increasingly drills in terrains leased
to them by dictatorships such as those in Chad and Equatorial Guinea. Lee Raymond
the corporation chief executive until 2005 was notoriously skeptical about climate
change and disliked government interference at any level. The company was widely
criticized for its slow response to cleaning its 1989 Valdez oil spill in Alaska”
(en.wikipedia.org).
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Table No: 3.18
“Royal Dutch Shell plc LSE RDSA RDSB commonly known as Shell is an Anglo
Dutch multinational oil and gas company incorporated in the United Kingdom and
headquartered in the Netherlands
Royal Dutch Shell plc
Type Public limited company
Traded as LSE RDSA RDSB
Euronext RDSA RDSB
NYSE RDS.A RDS.B
Industry Oil and gas
Founded 1907
Headquarters The Hague, Netherlands (Headquarters), Shell Centre, London,
United Kingdom (Registered office)
Area served Worldwide
Key people Peter Voser (CEO), Jorma Ollila (Chairman)
Products Petroleum natural gas and other petrochemicals
Revenue US$ 467.153 billion (2012)
Operating
income
US$ 46.447 billion (2012)
Profit US$ 26.592 billion (2012)
Total assets US$ 360.325 billion (2012)
Total equity US$ 188.494 billion (2012)
Employees 87,000 (2012)
Website Shell.com
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Created by the merger of Royal Dutch Petroleum and UK based Shell Transport &
Trading it is the largest company in the world in terms of revenue and one of the six
oil and gas supermajors. Shell is also one of the world most valuable companies. As
of January 2013 the largest shareholder is Capital Research Global Investors with
9.85% ahead of BlackRock in second with 6.89%. Shell topped the Fortune 500 list of
largest companies in the world. Royal Dutch Shell revenue was equal to 84% of the
Netherlands $555.8 billion GDP at the time. Shell is vertically integrated and is active
in every area of the oil and gas industry including exploration and production
refining distribution and marketing petrochemicals power generation and trading. It
has minor renewable energy activities in the form of biofuels. It has operations in over
90 countries produces around 3.1 million barrels of oil equivalent per day and has
44,000 service stations worldwide. Shell Oil Company its subsidiary in the United
States is one of its largest businesses. Shell has a primary listing on the London Stock
Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012 it was the
largest company on the FTSE with a market capitalization of £140.9 billion. It has
secondary listings on Euronext Amsterdam and the New York Stock Exchange”
(en.wikipedia.org).
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3.9 COMPANY PROFILE OF FOREIGN AUTOMOBILE
COMPANIES
Table No: 3.19
“Toyota Motor Corporation abbreviated TMC is a Japanese multinational
automaker headquartered in Toyota Aichi Japan
Toyota Motor Corporation
Native name トヨタ自動車株式会社
Romanized name Toyota Jidosha KK
Type Kabushiki gaisha (JPN)
Public (US)
Traded as TYO 7203
LSE TYT
NYSE TM
Industry Automotive
Founded August 28, 1937
Founder(s) Kiichiro Toyoda
Headquarters Toyota Aichi Japan
Area served Worldwide
Key people Takeshi Uchiyamada (Chairman)
Akio Toyoda (President and CEO)
Products Automobiles commercial vehicles engines motorcycles
Production output 9,909,440 units
Services Banking financing leasing
Revenue ¥22.064 trillion (FY 2013)
Operating income ¥1.320 trillion (FY 2013)
Profit ¥962.1 billion (FY 2013)
Total assets ¥35.483 trillion (FY 2013)
Total equity ¥12.773 trillion (FY 2013)
Parent Toyota Group
Divisions Lexus, Scion
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Subsidiaries 522 Toyota Group
Website Toyota Global
In 2010 Toyota employed 325,905 people worldwide, and was the third-
largest automobile manufacturer in 2011 by production behind General
Motors and Volkswagen Group. Toyota is the eleventh largest company in the world
by revenue. In July 2012 the company reported it had manufactured its 200 millionth
vehicle. The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his
father company Toyota Industries to create automobiles. Three years earlier in 1934,
while still a department of Toyota Industries it created its first product the Type A
engine and in 1936 its first passenger car the Toyota AA. Toyota Motor Corporation
group companies are Toyota including the Scion brand Lexus Daihatsu and Hino
Motors along with several nonautomotive companies. TMC is part of the Toyota
Group one of the largest conglomerates in the world” (en.wikipedia.org).
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Table No: 3.20
“The Hyundai Motor Company is a South Korean multinational automaker
headquartered in Seoul South Korea.
Hyundai Motor Company
Native name 현대자동차 주식회사
Type Public
Traded as KRX 005380 LSE HYUD
Industry Automotive
Founded December 29, 1967
Founder(s) Chung Ju-yung
Headquarters Seoul, South Korea
Area served Worldwide
Key people Chung Mong-koo (Chairman &CEO)
Products Automobiles, commercial vehicles, engines
Production
output
2,943,529 units (2011)
Revenue US$ 84 billion (2012)
Net income US$ 9 billion (2012)
Total assets US$ 109 billion (2012)
Total equity US$ 43 billion (2012)
Employees 57,105 (2011)
Website worldwide.hyundai.com
Hyundai was founded in 1967 and it along with Kia, together comprise the Hyundai
Motor Group which is the world fourth largest car maker based on annual vehicle
sales in 2010.In 2008 Hyundai without Kia ranked as the eighth largest automaker. In
2010 Hyundai sold over 3.6 million vehicles worldwide. Hyundai operates the world
largest integrated automobile manufacturing facility in Ulsan which is capable of
producing 1.6 million units annually. The company employs about 75,000 persons
worldwide. Hyundai vehicles are sold in 193 countries through some
6,000 dealerships and showrooms” (en.wikipedia.org).
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3.10 Need of the study
From economics point of view, rec. can be understood as a contraction of bus. cycle
along with the general slowdown in various macroeconomic activities. During
recession various macroeconomic indicators also do get affected varyingly. Various
economic activities like along with economic measures like Gross Domestic Product
(GDP), spending from em. Invest., utilization of capacity, incomes from household,
and also profits from business along with price rise face a downfall, whereas increase
in the unemployment rate and bankruptcies can be easily seen during recession.
Usually recession do come in existence with decrease in spending, which is mostly
followed by the adverse supply shock or in an economic bubble burst. Government
does try to take precautionary steps to avoid the effects of recession by increasing
supply of money and decrease in taxation along with some other macroeconomic
expansion.
The researcher gone through different review of literature related to recession at
national and international level but not able find out any study which shows the
comparative analysis on the impact of recession on Indian and foreign companies
selected from banking, insurance, telecommunication, petroleum and automobile
industries respectively. So, the present study tried to meet the gap. Therefore, the
present problem entitled, Study of the Impact of Recession on Corporate
Performance of selected Indian & Foreign companies has been chosen for
research.
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3.11 Objectives of the Study
Study’s obj. always decides a proper and definite track to carry out the desired
research activities. From such a point of view, to make the present study more
scientific, following objectives are as follows:
1.To analyze the nature and causes of recession.
2.To evaluate the effect of the recession on corporate performance of the selected
companies.
3.To study the comparative effect of recession on selected companies of public and
private sector.
4.To analyze the measures adopted by various countries to curve the recession.
5.To develop an action plan to fight recession.
3.12 Research Design and Research Methodology
3.12.1 Hypotheses
In order to have scientific study of impact of recession on corporate performance of
selected Indian and foreign companies the researcher has tested given null
hypotheses:
Ho1: By and large there is no sign. diff. in average values of operating profit per share
of Indian public and private companies during pre and post recession period.
Ho2: By and large there is no sign. diff. in average values of operating profit per share
of Indian and foreign companies during pre and post recession period.
Ho3: By and large there is no sign. diff. in average values of return on long term funds
of Indian public and private companies during pre and post recession period.
Ho4: By and large there is no sign. diff. in average values of return on long term funds
of Indian and foreign companies during pre and post recession period.
Ho5: By and large there is no sign. diff. in average values of return on net worth of
Indian public and private companies during pre and post recession period.
Ho6: By and large there is no sign. diff. in average values of return on net worth of
Indian and foreign companies during pre and post recession period.
Ho7: By and large there is no sign. diff. in average values of return on capital
employed of Indian public and private companies during pre and post recession
period.
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Ho8: By and large there is no sign. diff. in average values of return on capital
employed of Indian and foreign companies during pre and post recession period.
Ho9: By and large there is no sign. diff. in average values of dividend payout of
Indian public and private companies during pre and post recession period.
Ho10: By and large there is no sign. diff. in average values of dividend payout of
Indian and foreign companies during pre and post recession period.
Ho11: By and large there is no sign. diff. in average values of earning per share of
Indian public and private companies during pre and post recession period.
Ho12: By and large there is no sign. diff. in average values of earning per share of
Indian and foreign companies during pre and post recession period.
Ho13: Numbers of respondents are equally distributed on indicators to say nation is in
recession stage.
Ho14: Numbers of respondents are equally distributed on the main cause of recession
in India.
Ho15: Numbers of respondents are equally distributed on overall Impact of Recession.
Ho16: Numbers of respondents are equally distributed on the Impact of Recession on
companies.
Ho17: Numbers of respondents are equally distributed on things happen to companies
as the Recession runs its course.
Ho18: Numbers of respondents are equally distributed on what companies do during
Recession.
Ho19: Numbers of respondents are equally distributed on measures taken by
companies to survive in recession.
Ho20: Numbers of respondents are equally distributed on measures adopted by
government to tackle the recession.
Ho21: Numbers of respondents are equally distributed on present fiscal and monetary
policies to fight recession.
Ho22: Numbers of respondents are equally distributed on steps taken by government
to stop recession.
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3.12.3 Scope of Study
The current study is based on Ten Indian Companies and ten foreign companies (total
twenty companies) which have been selected from Banking, Insurance,
Telecommunication, Petroleum and Automobile industry respectively.
Industries Indian Companies Foreign Companies
1. Banking State Bank of India,
ICICI Bank Limited
HSBC Bank USA,
American Express
2. Insurance Life Insurance
Corporation of India,
Bajaj Allianz Life
Insurance Company
Limited
American International
Group, Inc.,
Met Life, Inc.
3. Telecommunication Bharat Sanchar Nigam
Limited,
Bharti Airtel Limited
Vodafone Group Plc.,
Virgin Media Inc.
4. Petroleum Bharat Petroleum
Corporation Limited,
Hindustan Petroleum
Corporation Limited
Exxon Mobil,
Royal Dutch Shell Plc.
5. Automobile Tata Motors Limited,
Maruti Suzuki India
Limited
Toyota Motors
Corporation,
Hyundai Motor Company
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3.12.4 Collection of Data
Source Primary
To gather the data from primary source, questionnaire was framed in order to collect
the related information in a comprehensive manner. The same questionnaire was
administered to 100 respondents. The respondent profile was categorized on the basis
of age, gender, designation, formal education and type of organization they work.
35% respondents were executives from selected companies, 30% respondents were
industry people, business associates and persons from chamber of commerce Agra
and rest 35% of respondents were academicians and economist. Among 100
respondents 27 % respondents were female working in above mentioned respective
sectors and rest 73% were male. Majority of them are post-graduates and having
professional degrees and no respondents was less than graduate in qualification.
Secondary Source
Annual Reports of selected companies and related websites.
3.12.5 Duration of the study
For the purpose of analysis of data, a period of six financial years from the 2005-2006
and to 2010-2011 has been taken.
3.12.6 Technique of Sampling
Convenient sampling technique.
3.12.7 Statistical Tools used
The following statistical tools for analysis and data presentation have been used:
graphs, percentage, mean, chi-square test and pared t-test have been used.
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3.12.8 Specific Research Methodology
In addition to the above stated generalized research methodology the following table
shows the application of specific techniques by the researcher to achieve objectives
individually –
Table No: 3.21
S. No.
Objectives
Research Methodology
1. To analyze the nature and causes
of recession.
To achieve this objective researcher
has explored secondary data
collected.
2. To evaluate the effect of the
recession on corporate
performance of the selected
companies.
To achieve this objective statistical
tool mean and chi-square test has
been used.
3. To study the comparative effect of
recession on selected companies
of public and private sector.
To achieve this objective statistical
tool mean and pared t-test has been
used.
4. To analyze the measures adopted
by various countries to curve the
recession.
Primary and secondary data have
been explored to achieve this
objective.
5. To develop an action plan to fight
recession.
Primary and secondary data have
been explored to achieve this
objective.
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3.13 Limitations of the Study
As we all knows, limitations are found everywhere in every. All achievements in life,
big or small take place with some hurdles or obstacles. Considering this aspect, the
researcher, in spite of putting the best effort could not escape from certain limitations,
which can be summarized as follows:
1. The study is confined to Indian and foreign companies only top twenty leading
organizations from five different industries.
2. The study is confined to five industries only.
3. The time period of the study was limited to six years and twenty organizations.
4. While collecting secondary data, it was difficult for the researcher to obtain
some of the data due to some confidential or unknown reasons.
5. Only six selected ratios have been taken into consideration for analysis of
secondary data due to limitation related to data collection.
6. Responses collected from the respondents through questionnaire may be
biased.
7. Though the researcher has incorporated significant parameters of recession,
yet more parameters and organizations could also be accommodated.