From battering in the stock markets to the infamous financial fraud in IT giant Satyam Computer Services, India Inc began 2009 on an ominous note but fought-off the effects of the global meltdown only to get sucked into pitched battles for turf or market share.
The end result is that the consumer benefited a lot with unheard of drop in telecom tariff, a wide-range of affordable small-to-luxury cars and great discounts for things ranging from garments to white goods.
The Ambani brothers’ fierce battle was brought to a boil with differences on gas supply reaching the Supreme Court, while telecom and auto companies fought a price war. But corporate India recorded better than expected profits.
The most marked development of the year was the Rs. 10,000-crore Satyam financial scam, disclosed by the founder B. Ramalinga Raju, forcing the government to redraft rules for corporate governance and auditing standards.
Telecom companies, including Reliance Communications and Bharti came under government scrutiny and special audits were ordered even as they fought a tariff war.
Elsewhere, firms in retail industry were dealt with body blows when the likes of Subhiksha went bust and Vishal Retail was forced to undergo debt restructuring to survive. Pharma firm Wockhardt, burdened with over Rs. 3,400-crore of debt, also had to undertake a CDR (corporate debt restructuring) and sell off non-core businesses.
The realty segment, perhaps the worst hit by the economic downturn, saw BPTP surrendering the largest-ever land deal of Rs. 5,006 crore in Noida due to inability to cough up finance.
The country’s biggest realty player DLF was also compelled to shed 9.9 per cent of promoter stake fetching Rs. 3,860 crore as it faced a fund crunch.
In the telecom sector, Bharti had to face disappointment when it had to call off the much-hyped $23 billion deal for amalgamation with South Africa’s MTN after nearly four-month-long intense discussions broke down in September.
It was the second time in over a year when Sunil Mittal-led Bharti Airtel had to pull out from talks for amalgamation of the two organisations in a complex deal that also required Central Government’s clearance for dual listing.
The automobile industry, however, had a different tale to tell. After struggling to overcome the impact of global financial crisis and liquidity crunch in the first-half of the year, the sector gained momentum later on. Towards the end of the year, car sales zoomed over 60 per cent in November, inducing global car manufacturers to focus on the market here.
Convinced that the future lies in compact cars, global majors, including Ford, GM and Toyota unveiled plans to launch small cars in India. Besides, auto players established dominance with Tatas giving the world its cheapest car Nano and bringing back from the financial brink the British iconic brands Jaguar and Land Rover.
With the situation becoming difficult, there were calls from various quarters to cut salaries of top executives.
Corporate Affairs Minister Salman Khurshid was heard the loudest when he asked CEOs to abstain from ‘vulgar’ salaries.
Nevertheless, Indians still managed a worldwide-best average six per cent hike in their pay at a time when the ‘vulgar’ salaries became a sore thumb in 2009 and everyone from CEOs to office assistants felt the pinch of the downturn.
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