Indian Business in 2014 : Top 10 highlights

For Indian business that lost its way in the policy quagmire and scams under the previous UPA government, the year 2014 arrived with a promise of Achhe Din or better days ahead. At the threshold of yet another new year, an assessment of key developments in India Inc reveals an intense optimism in the initial months of this year, tempered by a growing realisation that the confidence of the new government notwithstanding, fault lines in the economy are deeper than many estimated, and will take more time to fathom and set right. Meanwhile, business leaders with ingenuity went ahead, rewriting the rules and setting new benchmarks, despite strong negative undercurrents.

Following is a re-capture of the top 10 events in business this year:

1. The rally in the Indian stock market

The bulls were set loose in the stock market right from the early months of 2014, when investors got a whiff of a BJP government at the Centre. The sentiment gathered intensity after exit polls in May predicted a clear majority for the Bharatiya Janata Party, led by Narendra Modi. The BSE Sensex crossed 24,000 points for the first time on May 13,  followed by 25,000 on May 16, and 26,000 on July 7. Till early November, there was no stopping the bull run, with the index crossing 28,000 on November 5. The correction, though, began in December, with the Sensex shedding 538 points on December 16 as the rupee slumped to a 13-month low against the dollar and world equity markets saw a sell-off. The general opinion among experts is that there could be more correction in the offing, and investors should take a guarded approach.

2. Rise and rise of Gautam Adani

On the day the results of the May Lok Sabha elections pronounced Modi and his party the clear winners, came an announcement from Gautam Adani-led Adani Ports that it had acquired Dhamra Port in Orissa from Tata Steel and L&T Infrastructure Development Projects for a whopping Rs 5,500 crore. Adani, who transformed his company into a Rs 48,000 crore giant over 26 years, had been the favourite whipping boy of the present opposition parties for the alleged favours he received at the hands of Modi when he was the Gujarat Chief Minister. Not only has Adani strongly denied any undue help from Modi to build his empire, he has gone ahead and continued his quest for big expansion. In July 2014, Adani Ports and Special Economic Zone got environmental and coastal regulation zone clearance from the Ministry of Environment & Forests, and Adani Power acquired Lanco Infratech's 1200 MW Udupi power plant for Rs 6,000 crore in August. Given his proximity to the PM, it was no wonder that he was part of a business delegation to Japan, coinciding with the PM's visit to that country.  

3. SC cancels 214 of the 218 coal block allocations

For infrastructure businesses that feared the worst following the CAG allegations of irregularities in coal block allocation under the UPA regime, the Supreme Court's order  on September 24 cancelling all but four coal block allocated by the government was a proverbial bolt from the blue. The mining companies involved were given just six months breathing time to wind up their operations. In October, however, the President cleared a government ordinance allowing an e-auction of coal blocks and also allowing private companies to sell coal in the open market.

4. Sun Pharma buys Ranbaxy to become India's largest pharma company

Dilip Shanghvi, Sun Pharma's promoter, is a man of few words but is extremely aggressive when he pursues his goals. After successfully bringing Israel's Taro Pharma under its fold at the end of a long-drawn legal battle, Shanghvi has gone ahead to buy Ranbaxy from its Japanese owners Daiichi Sankyo in a $4 billion deal in April. The deal gives Sun access to Ranbaxy's giant domestic and international network of medicines, but it also places it precariously under FDA's close watch, since Ranbaxy was already under the FDA scanner for lax manufacturing standards.  The fighter that Shanghvi is, expect him to get down to serious business and address the FDA related issues on a war footing.

5. Kotak Mahindra buys ING Vysya to become India's 4th largest private bank

In November, in an all stock transaction, ING Vysya Bank decided to merge with Kotak Mahindra Bank creating the fourth largest private sector bank, with a pan-India network. The combined banking entity will have 1,214 branches with a widespread network across the country. The merged entity will also leverage ING's network to tap global business. Surely, this is another feather in the cap for Uday Kotak, who has been credited with creating a financial services giant in India over the past two decades.

6. Rise of the e-commerce brigade

The Big Billion Day sale organised by e-tailer Flipkart on October 6, where it sold products worth Rs 650 crore in a matter of 10 hours had an unexpected result - it attracted enforcement directorate sleuths who are reportedly probing the sale for alleged violation of the Foreign Exchange Management Act or FEMA. After the sale, many consumers were left complaining of inflated prices and poor consumer experience. Big retailers have also questioned such practises by online retailers, alleging that offering massive discounts below cost price is discouraging consumers from buying from offline stores. But his has not deterred Sachin Bansal and Binny Bansal, Flipkart promoters, or Kunal Bahl of Snapdeal, and other online companies from offering massive online discounts to attract buyers. Buyers, too, seem to be happy devouring such deals. Japan's Nomura Research expects Indian e-commerce revenue to grow about four times by fiscal 2018.

7. Tycoons turn philanthropists

After proving their mettle in the business world, some corporate tsars hogged the limelight by loosening their purse strings to support philanthropic causes. Wipro Chairman Azim Premji set a new benchmark in corporate charity by donating as much as Rs 23,000 crore to charity by donating his shares to a trust. Meanwhile, metals tycoon Anil Aggarwal decided to donate 75 per cent of his wealth to charity after meeting Bill Gates, the world's richest person. Agarwal has a fortune of $3.3 billion (Rs 19,800 crore). Industrialist Ratan Tata is chairman of four philanthropic Tata trusts, where he oversees the Group's contribution to charity. It offered Rs 310 crore for the underprivileged in 2012-13.

8. Murthy steps down at Infosys

Taking cognisance of the need to bring in an external CEO to chart a new course at Infosys, executive chairman NR Narayana Murthy and CEO SD Shibulal stepped down in June to pave way for Vishal Sikka, former Chief Technology Officer of SAP to take over as CEO. The company was under pressure for some time to bring in a new chief executive after a slew of exits at the top level that raised investors' concerns.

9. Modi's Make in India campaign launched

In September, PM Modi launched his flagship Make in India campaign, which aimed to put India on the global manufacturing map and bring in new technology and capital, as well as create millions of jobs. As many as 25 growth sectors were identified and corporate captains lauded the initiative, but some cautioned the need to change rules on the ground, including land acquisition and taxation policies before such a massive project could take off. RBI Governor Raghuram Rajan recently joined critics of the campaign, saying the sluggish world economy may not support another export-oriented country, but that has hardly dampened the confidence of the new government in making this happen.

10. Raghuram Rajan holds on to interest rates

Notwithstanding the hue and cry raised by corporate India over high interest rates, the RBI governor has remained unfazed, carrying on his battle against inflation. In the RBI's monetary review in early December, Rajan kept the key rates unchanged, arguing that the current economic environment  does not warranty any rate cuts. His stance achieves significance since even the Modi government is seen as favouring an early reduction in rates to boost economic growth. Rajan's firm stance on rates seems to have, however, found success, with consumer price inflation falling to an all time low of 6.46 per cent and wholesale price index easing to a five year low of 2.38 per cent in September 2014. There is, however, an expectation that RBI will lower rates in early 2015.