Want to be succeful? Take a long-term view, says Indra Nooyi

Pepsico’s Indra Nooyi reiterates that she remains bullish on India, while Sebi’s UK Sinha makes the case for using pension money to pump capital into the market, reports Faisal Kidwai.

Companies should take a long-term view rather than focus on short-term gains, said Indra Nooyi, Chairperson and CEO, Pepsico, in Mumbai on Friday. “Corporations that stay calm and think down-to-earth instead of displaying aggressiveness, especially during time of crisis, are the ones that are successful," she told Confederation of Indian Industry’s National Conference.

Nooyi, who joined the world's second-largest food and beverage business in 1994 and became its CEO in 2006, described how everybody was happy with Pepsico before the 2008 global economic crisis but then the atmosphere began to change post-slowdown. Shareholders started questioning the direction and strategy of the company, especially its move towards healthy and nutritious food and beverages.

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Narrating an incident, she said an investor publicly asked her why a company famous for its sodas and chips was selling these good-for-you products, but she stuck to her guns because she knew that not only the United States but the world was becoming more health conscious and therefore the long-term view required Pepsico’s presence in this segment. Later this same investor came up to her and praised her decision.

The Chennai-born Nooyi was addressing the who’s who of India Inc, including Oil and Natural Gas Corporation’s Sudhir Vasudeva, Infosys’s Kris Gopalakrishnan, ITC's YV Deveshwar, Wipro’s Azim Premji, Bajaj’s Rahul Bajaj, Godrej’s Adi Godrej and TCS’s S Ramadorai.

Reiterating her belief in India, she commented “that the fundamentals of our country are very brilliant and I don't see any reason why the great Indian story has lost so fast its sheen and the reason for the pessimism.”

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Pepsico has already invested Rs 10,000 crore (Rs 100 billion) since entering the Indian market and plans to further invest more than 30,000 crore (Rs 300 billion) in innovation, manufacturing, infrastructure and agriculture.

Earlier, Securities and Exchange Board of India's Chairman UK Sinha laid down the principles that should guide growth. “The three growth mantras of Sebi are transparency, accountability and minority principle. If these are not compromised, the market can deliver as expected,” said Sinha.

Revealing that about 12,000 firms are violating different clauses of the Companies Act, he disclosed that the regulator will issue guidelines to improve the reporting pattern of companies listed on bourses.

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Sinha admitted that Indian companies are too dependent on foreign institutional investors for raising capital and that means they are beholden to their whims and fancies, but he blamed this situation on firms sitting on huge pile of cash instead of investing them.

Urging the industry leaders to utilise retirement savings, he cited the case of mature markets, such as the United States, where pension funds play a big part in raising capital, adding that this would also bring down the dependence on FIIs as companies would have easy access to domestic cash.

At the event, the CII honoured Ratan Tata, Chairman Emeritus, Tata Group, with the President's Award, which was presented by P Chidambaram, India’s Finance Minister.

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Chidambaram praised Tata not only for putting India on the global map but also by how he conducts his everyday life, such as living in an apartment, not a mansion, walking his own dogs and weighing each and every word.

He said while many industrial houses own and run their companies, the Tata’s leave the running of their firms to professionals, adding that others should emulate what Tata’s have done. Ratan Tata commented that he was humbled and honoured by the award.