New Delhi: Mukesh Ambani’s Jio, India’s largest wireless operator and digital services provider, is set to become the country’s largest-ever telecom company to go public. The planned listing has generated huge global media attention for the scale of the Initial Public Offering and what it represents.
Reliance Industries chairman Mukesh Ambani Friday finally opened Jio up for the IPO after multiple delays.
In keeping with India’s tradition of family-run business empires, the IPO will be spearheaded by Ambani’s children: Akash, Isha and Anant Ambani. And, according to The Economist, there is a problem here: family-controlled businesses becoming all too dominating.
Jio’s IPO is a “thrilling story of the new Indian economy, featuring a tech entrepreneur hoping to get rich and ordinary Indians using the stock market to get a stake in his success”. But, there’s also a big reason to worry: India’s corporate governance is “dismal”, the report says.
“Problems dog India’s family-run conglomerates. As we report, the Tata Group, long the gold standard of corporate probity, has been consumed by a boardroom drama. The regulator may force it to list, too.”
Even in Reliance, succession remains uncertain. “The three children of its boss, Mukesh Ambani, are on the board and in prominent operating roles. Yet the empire still seems to depend on Mr Ambani,” the report says.
“Family-run conglomerates dominate India’s economy; the three most prominent could be joined by the Godrejs, Mahindras, Birlas and many others. Promoters, who control listed companies, still hold roughly half the equity on the National Stock Exchange; the share of free-float is among the lowest globally.”
While the SEBI has changed the rules to allow Jio to go public by floating only 2.5 percent of its shares, first-time investors will now be entrusting their savings into companies whose governance they have no power to influence.
“When promoters dominate boards, related-party transactions, opaque group structures and succession decisions can be shaped around family interests rather than the company’s. No wonder many Indians would still rather put their trust in gold.”
This brings us to the drama unfolding within the Tata Group’s top brass, which is delaying succession planning and affecting both the conglomerate’s companies and its airline arm.
“Jamsetji Tata, the Victorian founder of his family’s business empire, dreamed big. He had four ambitions: to open a world-class hotel in India; to build the country’s first steel plant; to power Bombay (now Mumbai) with hydroelectricity; and to establish an Indian scientific institute to rival those in Europe. Though sceptics scoffed, all were eventually realised,” The Economist writes.
Today, Tata Group sells everything from salt to software. “But investments in its new ventures—an airline, a digital super-app, smartphones and semiconductors—are absorbing vast amounts of capital.”
What is the succession battle? “In February, Noel Tata, the Trusts’ chairman, withdrew his support for Natarajan Chandrasekaran to have a third five-year term running Tata Sons. The two met to clear the air before a board meeting in May, at which some of the group’s lossmaking new entities gave presentations.”
This dispute is compounded by another long-running dispute, whether Tata Sons should remain private. RBI is mounting pressure on the company to go public. “An RBI regulation requires non-bank financial corporations, which carry out banking functions but are regulated differently, to be listed. Though the holding company is in the investment business, Tata Sons argues that it is not a bank and does not intermediate between savers and borrowers. It has applied for a waiver, which the RBI has so far denied,” the column highlights.
Chris Kay writes for Financial Times about India’s unusually late monsoons this year, and why it has economists, investors and farmers worried.
“Mumbai is on track to record one of its driest Junes in nearly two decades. The city’s reservoirs are only 10.35 per cent full and authorities have imposed water restrictions, including suspending supplies to construction sites and to swimming pools,” Kay writes.
Beyond the prospect of fewer laps, the monsoon’s slow advance is being tracked nervously by economists, investors and farmers alike. Millions of farmers rely on the seasonal rains, and while agriculture now contributes a smaller share to India’s economy than it once did, it still employs 43 percent of the workforce and underpins rural consumption.
A deficient monsoon can dent crop yields, reduce farm incomes and fuel food inflation, Kay explains in FT newsletter.
Nikhil Inamdar of the BBC comments on India’s ever-growing cash transfers and welfare schemes, arguing to make them “smarter” and “cheaper”.
“The world’s fastest growing major economy is increasingly dependent on dole to keep its poorest people out of desperate poverty. Over the past decade, government cash transfers, particularly directed at women and farmers, have emerged as a major welfare tool for poverty eradication in India,” he writes.
The report notes how federal and state allocations for such schemes have grown more than 20 times from under 2 billion dollars in 2015 to nearly 30 billion, according to data from ProjectDEEP, an organisation that works on cash-based policies across the country.
“They now constitute just under 1% of India’s GDP and over 10% of its social sector spending, and this growth outpaces spending increases on flagship social schemes that guarantee food security and employment.”
The report notes that 17 out of 28 Indian states now provide monthly cash transfers compared with a mere four in 2019, according to Crisil Intelligence.
“The transfers range from 1,000 rupees ($10.5; £7.7) to 2,500 rupees per month, depending on the state. But a median cash transfer of 1,500 rupees per month could be covering 74% of monthly expenditure in rural areas and 51% in urban areas for the bottom 20% of households, making them a ‘new buffer for India’s household consumption”, Crisil Intelligence said in a recent report’.”
While these programmes have mostly been directed towards women and farmers, schemes for unemployed youth are also increasing.
These schemes are being run at a heavy financial cost, says the report. “According to Crisil, in fiscal 2026, gross market borrowing by states jumped 15.2% year on year – faster than that of the federal government. And of the states giving cash, 12 recorded double-digit growth in market borrowing.”
Most schemes don’t have an end date and have been found to largely improve short-term stability rather than enable a sustained exit from poverty, Inamder reports.
Experts are of the opinion that as these schemes become more politically entrenched, policymakers need to think more creatively about how such schemes are designed.
(Edited by Ajeet Tiwari)
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