Desperate First Signs for India Inc

Is the slowing global growth and other prevailing economic conditions pushing India Inc out of foreign markets? It seems so, going by the recent cases across sectors. While there have been several such exits reported in isolation in the last several months, Friday saw three of India’s leading groups – JSW Steel, GMR Group and Natco Pharma – engaged in steel, infrastructure and pharmaceuticals, respectively, departing from some of their foreign businesses.

Top steel maker JSW Steel is selling a 70 per cent stake in its Chilean subsidiary, Santa Fe Mining, for just $700 and intends to dispose of its stakes in other subsidiaries in the country in due course, the company said in a stock exchange filing. It also stated that prevailing market conditions had made it economically unviable for its two subsidiary companies to continue mining operations in that market.

India’s leading infrastructure developer, GMR Group, also said on Friday that it has signed definitive agreements to divest its entire 40 per cent stake in Mactan Cebu International Airport in the Philippines for an upfront payment of Rs 1,330 crore. GMR Airports International, a step down subsidiary of GMR Infrastructure, has entered into definitive agreements with Aboitiz InfraCapital Inc (AIC), for the latter to acquire shares in GMR-Megawide Cebu Airport Corporation. GMR-Megawide is a joint venture between GMR Airports International BV and Megawide Construction Corporation, and was the developer and operator of Mactan Cebu International Airport.

Meanwhile, Hyderabad-based drug maker Natco Pharma’s board has approved a proposal to sell its 15 per cent stake in a joint limited liability company Nativita in Belarus for 345,000 euros (nearly Rs 27.5 million) to Russian drug maker Pharmasyntez-Nord.