Managements should focus on shareholder value: ICICI chief
New Delhi, February 19 (HT Correspondent)
With the stock markets being buoyant the increasing market capitalization of corporates become 'acquisition capital' and managements should focus on enhancing shareholders' value rather than protecting the promoters stake, said ICICI chief K. V. Kamath here today.
Speaking at a seminar on business strategies for managing the future, organized by PHD Chamber of Commerce and Industry (PHDCCI), Kamath said those who would not enhance shareholders' value will risk of deprivation of capital and will become easy takeover target. The valuations of the company will be the best protector for any management.
"With the increasing complexities in the environment, and the changes in the regulatory and institutional framework, 'business as usual' is no longer an option", he added.
Kamath said with the changed strategic focus, cost factors are not as dominant as before. The new wave restructuring is based on 'unlocking' hidden shareholder value from within the corporation, he observer. Companies often use merger and acquisition to consolidate and extract locked values in the systems, he added.
Speaking on the occasion, Tata Industries managing director K. A Chaukar said any company which wants to survive the current changes will have change its focus. Every company will have to target to become one of the first three companies in the sector, he opined.
"If you are unable comprehend to become first three companies than exit from the business right away otherwise you will lose value every day", Chaukar argued. There is no time for emotional attachment with any business, he added.
Ballarpur Industries Ltd (BILT) managing director Gautam Thapar also admitted that the management needs to have vision and no question of only protecting the promoters stakes in the company. It is difficult to become number one in the industry but it is more difficult to retain number one position, he added.
-Hindustan Times
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