Mumbai – city of infinity
First-time visitors to India’s financial and industrial heart Mumbai are generally overwhelmed by the size of Asia’s number one megacity. 20 million people of all races and religions are gathered in one big chaotic melting pot on the central west coast of India.
Mumbai is a mirror of the numerous challenges and opportunities of modern India. The city (and the country) is the definition of a demographic and economic explosion. India’s growth rates are stunning, and the population has passed 1 billion. Poverty and slum areas are growing with the speed of light, but so is wealth. More the 300 million people, corresponding to the entire US population, now belong to what might be referred to as the new economic muscle of India, the middle class.
Most companies operating in India are facing challenges in terms of labour rights, human right issues, environmental protection and not least corruption. Apart from being the worlds’ largest democracy India is also a very young democracy that often fails to live up to international norms and to protect vulnerable groups in the country.
Many companies do, however, have a sound business model. Nordea is in Mumbai to meet companies and to identify Indian companies performing well from an environmental, social, governance as well as financial perspective.
One of the potential companies for an investment portfolio is Jain Irrigation. The company was founded in 1963 by the Jain family. They had been farmers for generations, but now the company operates in 123 countries around the world. As part of its ranges of products and services the company produces and sells organic fruits to the world markets but its core business is still small-scale irrigation systems for Indian farmers.
Another company is Phoenix Mills. Originally, the company ran mills in central Mumbai but today the core business is shopping malls. The rapidly growing number of consumers in India’s megacities has a huge potential and companies like Phoenix Mills are urban pioneers. However, acquiring land to develop in India can be a tricky business and corruption and bribes are often involved. Phoenix Mills has therefore decided only to buy land from other businesses to avoid being involved in corruption. Using unskilled and underpaid labour is another issue but Phoenix Mills knows the risks when involved in both construction and operation of shopping malls and hotels – especially when there is a need to attract sceptical foreign investors to finance the company’s wish to expand.
See the video from the team’s visit to India