Why more South Indian firms aren’t on Sensex

North versus South is an evergreen theme to explore for newspapers and magazines and, of late, some TV stations too.

For decades, journalists, historians and pop-sociologists (all usually South Indian) have compared and contrasted politicians, filmstars, cricketers and others from either side of the Vindhyas to drive home their point (usually that the South is somehow better for the reasons they listed).

In most such scorecards, the South gets good marks for “culture”, simplicity, frugality, artistry, education, filter coffee and the masala dosa. Routinely, south Indians are accused of being docile, decent and civilised but lacking in drive and ambition unlike their thuggish, loud-mouthed northern counterparts, whose cut-throat killer instinct is blamed on their survival mechanisms evolved while combatting brutal invaders and an even more brutal climate.


The February issue of the newly launched edition of Fortune India looks at businessmen from peninsular and heartland India. And the piece (written by a North Indian and a South Indian), like most previously published pieces, is replete with the usual sweeping generalisations about the South that leaves you wondering as always, “Gee, are they really talking about us?”

It says:

# “Companies in the South are seen as generally conservative, non-aggressive and reactive, while their counterparts in the North are considered aggressive risk-takers. The differences are sometimes so stark that they seem like two different countries. That’s an outcome of history, tradition and cultural ethos.”

# “The Bombay stock exchange was set up in 1875, while the Calcutta stock exchange was incorporated in 1908. The oldest exchange in the South, the Madras stock exchange, was established only in 1937. Perhaps because of their historical familairity with, and proximity to, the stock market, the average North Indian business is more willing to raise funds from the stock market than a southern company.”

# “Only two south Indian companies find a place on the benchmark 30-stock BSE Sensex. Both these are IT companies and both were moved to the South. Wipro was founded in theNorth by a North Indian business family belonging to the Ismaili community. Infosys, started by a Kannada Brahmin, was set up i Poone before it moved to Bangalore.”

# “Southern business houses are not in favour of chasing stock markets for better valuations and leverage and do not want to be driven by quarterly expectations…. Even when there is a need for funds, the first option would be internal accruals. Raising money from the market is the most expensive form of fund-raising.”

# “The stark difference between businesses on either side of the Vindhyas is a product of the way they look at growth. Businesses in the South behave like the tortoise in the fable. They move slowly but steadily. Companies are legacies to be inherited and passed on, not just cash cows to be milked dry.”

# “The North which has seen several invasions has provided fertile ground for entrepreneurs and risk takers. For those who have witnessed periodic destruction, being aggressive and acquisitive and living for the moment comes naturally. The mayhem following Partition only strengthened that feeling, especially among those who had to abandon flourishing businesses in what is now Pakistan.”

# “Diversification is more common in North Indian companies, while core competence is valued down south…. When it comes to growing inorganically, North Indian businesses lead.”

# “The ability and willingness to risk capital means that North Indian businesses are more open to going global. South Indian firms are content to grow organically and in their home territory. Fiscal prudence and frugality in the scale of operations prevents South Indian companies from making expensive global plays. Even when they have matching resources they are reluctant to enter the global arena.”

# “It’s not just global forays; companies in the South are often unwilling to cross the Vindhyas. Slow and steady growth has its advantages but the focus on stability could cost a group in terms of missed opportunities.”

# South Indian businesses are generally seen as legacies, so importance is given to succession plans, and handing over begins during the patriarch’s lifetime. Lack of this has dragged down many North Indian businesses. Bitter, open battles led to court battles that lasted for years.”

The only concession the Fortune India piece makes to “Madrasis” is in doffing the hat to the GVKs, GMRs, Satyam and Maytases of manna Andhra Pradesh.

“Andhra guys are an aggressive bunch, says the Fortune India piece. Most of these companies are promoted by families that made their fortunses in farming. They are comfortable taking risks because they know that they can always fall back on agriculture if all else fails. Like most traditionally agrarian communities, they have a feudal mindset. They typical Andhra-backed business hosue is seen as more corrupt than its other South indian business counterparts, an impression fostered by tis willingness to go to any lengths to get its work done.”

Photograph: courtesy Seattle Examiner

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19 Responses to “Why more South Indian firms aren’t on Sensex”

  1. twistleton Says:

    Ok here’s what i think happened.

    Initially the two writers got along famously. However, slowly their geographic loyalties surfaced and insults and choice (local) swear words began to fly thick and fast. Then they finally arrived at a compromise. They decided to write equally disparagingly about businessmen from the North and the South.

    Then they went for an Andhra style lunch and weepingly (courtesy Andhra hot pickle) declared to remain bosom friends forever and hail the Andhra businessman.

  2. div Says:

    How about comparing American industry versus Indian for once?

    Companies such as Microsoft and Google are headed by billionaires but they are also very good employers by any measure.

    Companies such as reliance, tata etc. are headed by people whose wealth compares very well with the likes of Bill Gates, Larry page etc. but somehow this wealth doesn’t trickle down, and at a global level, they are no where near being called good employers.

    American companies innovate, hire PhDs, have research labs and continuously strive to improve their products. (Ever heard of IBM deep blue? it has got nothing to do with their business, Do you know that Microsoft research has biology research groups? Do you know that most computer, internet and telecommunications innovations came from Bell Labs? This includes UNIX, C, C++ among hundreds of other things)

    Most Indian companies on the other hand are happy to carry on their mundane tasks. The key to success of companies like reliance doesn’t seem to be innovation, but with their financial and political ability, get more and more resources, try to get into every sector, and mint more money.

    Most American companies are “self-made”, while the Indian companies like Reliance, Bajaj, Wipro, Tata etc. are just “dynastic” although the trend seems to be changing in India as well.

    I would be wrong to say all American companies are great, perhaps the financial companies and insurance companies and many other companies aren’t really like what I said,but in India, many companies still seem archaic–17th century family businesses.

  3. mysore peshva Says:

    yeh kya north south laga rakha hai! kuch lete kyun nahin?

  4. vikram Says:

    @ div
    here comparison is drawn between indians and not between indians and Americans. Americans are more opportunists.

  5. Balu Says:

    Well said Div!
    Completely agree with your opinion on Indians
    They are nothing but primitive in all aspects!
    They have a long way to go!
    Well, there is nothing wrong in dreaming to be a world power.
    Hope they can achieve it at least in another 200 yrs provided if they can correct their rotten minds now.

  6. Sapna Says:

    Wow! wonder what instincts drove the writer to draw such sweeping generalizations. Guess it is the tendency to conform to the most acceptable public opinion. why bother with the facts and examples

    @div: Good one!

  7. twistleton Says:


    You put your finger right on the nub of the problem. Glamourized labour is all that’s happening in our country.

  8. Nastika Says:

    Food for thought for the authors to compile,
    1) American industry versus North Indian industry
    2) American industry versus South Indian industry

  9. babuds Says:

    This was a story told by a DOT vendor from Bangalore in Eighties, a friend of my friend.

    “When DOT floats tender for copper wire, I meticulously go through yellow pages and industrial directories to float enquiries with Copper wire manufacturers. Whereas my northern counterparts simply go out with a pair of cutting pliers to cut copper wire from telephone poles. There is no way I can compete with them.”

    Now Andhra overtook everybody else, in producing such robber barons. I agree.

  10. DailyBread Says:

    >Glamourized labour is all that’s happening in our country.

    Ignorance is bliss. Whats wrong with glamorized labour or for that matter any labour? I guess you guys have never heard about our success through process innovations in the absence/access of/to capital for most part of our industrial history.

    We should also remember that there was a license/permit Raj for 4 decades after our independence. Before that we were ruled by British from the days of Industrial revolution.

    Happy to inform you (ie if you didn’t know) that politicians in India are accumulating capital at a pace simply impossible to imagine. They will be our true blue Sandhill Road equivalent VCs. They will underwrite the creation & dominance of India’s Googles, Ciscos, IBMs, Apples, GMs, P&Gs, Boeings, Pfizers, Monsantos, Cokes, KFCs, GEs, Citibanks, Lockheed Martins, General Dynamics, etc. etc.

    While we are at it, here is something for the reading pleasure of our Deshwasis, : http://swaraj.nationalinterest.in/2010/02/10/ten-thousand-godhras/

  11. the colonel Says:

    cut , dessicate, investigate, and kill the patient.

    fcuk north-south.

  12. Karavali Says:


    >They will underwrite the creation & dominance of India’s Googles, Ciscos, IBMs, Apples, GMs, P&Gs, Boeings, Pfizers, Monsantos, Cokes, KFCs, GEs, Citibanks, Lockheed Martins, General Dynamics, etc. etc.

    That’s delusional. At best they will float real estate companies.

    >While we are at it, here is something for the reading pleasure of our Deshwasis, : http://swaraj.nationalinterest.in/2010/02/10/ten-thousand-godhras/

    Good article and analysis. But it’s fallacious. Most of the English Media (visual and print) – especially the Pink sheets – steadfastly run down socialism and advocate lean Government. The shrillness of Godhra may be missing from their reportage but they do make a good case against socialism nevertheless.

  13. chriskb Says:

    They are ‘Sapad Ramans’.

  14. mounaprasad Says:

    >>Both these are IT companies and both were moved to the South. Wipro was founded in theNorth by a North Indian business family belonging to the Ismaili community. Infosys, started by a Kannada Brahmin, was set up i Poone before it moved to Bangalore.”>>

    Conducting a survey by quoting half truths and lies paraded as cardinal truths seems to be the hall mark of these guys who have written the article. Wipro Infotech was started in our own Vontikoppal, Mysore and later on a office was opened in Bangalore. Wipro parent company was started in Amalner, a part of Maharashtra (WIPRO stands for Western India Products..for the benefit of the igramuses who have written this article), and the last time I checked Maharashtra was in the west. Infosys was started in our own Jayanagar, Bangalore. So much of peddling a well researched report.

  15. cp Says:

    The India map you have shown (via Seattle) is clearly a pre-1947 map! As a Mangalorean, I’ll say we would have been better off under Madras.
    At least, the Tamil politicians steal money from the Centre and provide free television sets back home. Our politicians steal money from the state and give it to Kerala temples!

  16. div Says:

    Even as we write these messages, folks at IBM are busy with their next AI innovation:


  17. Abhi Says:

    Div – I do no understand why are you imagining competition with America. Let us come to terms with reality.

    Its funny how some Indians have suddenly started to think as if we are in some competition with developed nations.

    We first need to come to a a basic level of civilization like having roads, not a million people crawling on them, etc. Then only can you build artificial intelligence and compete with IBM.

  18. DailyBread Says:


    >That’s delusional. At best they will float real estate companies.

    Sir, you underestimate the intelligence of our esteemed rulers, they have invested in every sunrise & traditional sector, i.e. they have very well diversified investments.Two examples, check out the investments of MK+extended family and Sharad Pawar+his family, you will know where the smart politicians money is going.

    Our own sultans of Sadashivanagar & RT Nagar have provided funding to atleast 200 Tech startups.

  19. div Says:

    @Abhi: who said we are in a competition? My original message means anything but competition. Please try to understand a message first before commenting on it!

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