On February 2, India erupted in celebration when the Tata Group won a bid for the Corus Group—the Anglo-Dutch descendant of British Steel—for more than $12 billion, the largest acquisition ever by an Indian firm. Headlines spoke of empires striking back, while pundits and industrialists said India had at last arrived as a world power.

The deal followed just a few months after the LN Mittal group’s $32.4 billion takeover of Luxembourg-based Arcelor ended five months of ding-dong corporate battles, an acquisition that created the world’s largest steel entity.

Mittal’s triumph in the takeover saga stoked Indian national pride in a big way, even though he didn’t own a single steel plant in his country. It scarcely seemed to matter that Mittal hadn’t lived in India for decades and resided in one of the most valuable private homes in Britain, a sprawling mansion in London’s Kensington Palace Gardens.

And if the Tatas were in M&A overdrive, could the Birlas be far behind? Ten days after Tata’s multi-billion-dollar acquisition, Hindalco Industries, a flagship company of the Aditya Birla group, announced an agreement to acquire Novelis Inc, the largest flat-rolled aluminium maker in the world, for $6 billion (Rs 26,400 crore). The US-Candian company operates through 36 manufacturing locations in 11 countries and has around 12,500 employees. It occupies the top position globally in terms of supply to beverage can industry with a share of 43 per cent and to the foil products industries with a share of 19 per cent.

Announcing the deal, Kumarmangalam Birla, chairman of the Aditya Birla group, the fourth-largest Indian business group by sales turnover ($12 billion at last count), said: “The deal will catapult the group to the Fortune 500 list three years ahead of what we had targeted.”

The deal, when consummated in the second quarter this year, will also catapult Hindalco to No. 5 rank globally as an integrated aluminium player. Hindalco, like Tata Steel, is also in the midst of a gargantuan greenfield capacity expansion plan that’ll cost it a whopping sum of Rs 25,000 crore.
The party didn’t end there. Azim Premji, head of India’s third-largest software exporter, Wipro, said his company was looking to buy IT services firms, especially in Germany this year. This was part of Wipro’s global acquisition plan searching for firms that generate revenues of up to $200 million. Premji said the NYSE-listed company was looking at companies in infrastructure. Also on his shopping list were IT companies dealing with energy utilities, data centres, engineering and healthcare. And money was no problem said India’s richest man. “We will spend on what we have to spend. We are sitting on $1 billion in cash,” said Premji.

A takeover fever has gripped India Inc. The deal street is buzzing as never before with companies making takeover or merger announcement on a daily basis. Almost every listed company is on the prowl—both at home as well as abroad—looking for a suitable prey. 

Describing Tata Steel’s acquisition of Corus as an important milestone in the history of corporate India, Peter Sands, the CEO of Standard Chartered Bank Group said: “India Inc has just began its journey in overseas acquisitions. The summit is a long way off.”

As the value of overseas bids by Indian firms soared to $21 billion last year from less than $1 billion in 2000, according to the market researcher Dealogic, the takeover of Western companies by Indians has struck people in India as evidence of a delicious reversal of fortune: a once-proud civilisation, having fallen to the humiliations of colonisation, is now buying out the hallowed corporations of the West.

The Economic Times painted that sentiment across its front page early this month with a huge drawing of what New York’s Times Square could look like once Indian companies complete their global acquisition spree. Out were the Pepsi and Starbucks billboards. The new signages were Reliance, Tata and Mittal.

The euphoria began in earnest early last year when Indian-born steel magnate, Lakshmi Mittal, jolted Europe with a $23 billion hostile bid for Arcelor. Even though his company was based in Holland and managed from London, and he had no mills in India the Indian government threw its weight behind Mittal. This was seen as a message to European politicians and bankers who—often openly—expressed their displeasure at an Indian wanting to take over a blue-blood European company.

However, steel experts say the Tata-Corus deal may, in some ways, be more significant than Mittal’s Arcelor takeover because Tata is firmly Indian, based in India and using Indian money to pay for its goal of setting a global footprint.

As ever more Indian acquisition deals were announced, most of them smaller and less controversial, a kind of takeover nationalism emerged. A recent survey published by the Chicago Council on Foreign Affairs concluded that Indians see their country as second only to the United States in its influence in the world. They also expect the global sway of the United States to wane over the next 10 years while the power of India continues to rise.

Indian companies have many good reasons for gobbling up companies abroad. For drug makers like Ranbaxy, buying the marketing division of an American pharmaceutical firm is a way to purchase instantly, rather than build laboriously, a sales force. For an automaker like Tata Motors, acquiring Daewoo of Korea quickly injected expertise in heavy trucks into an Indian company still producing vehicles little different from those made in the 1970s.

The takeover euphoria has set off a public debate in India about why it still means so much to Indians to score points over the West. One reason, perhaps, is that the boom in acquisitions is both a cause and a reflection of a deeper shift in the national psyche, as India casts away the lingering ethos of its colonial past and the socialist era that followed, and retrains itself in the ways of rough and tumble of capitalism.

For decades, Indian writers have criticised their fellow citizens for their self-hatred and irrational reverence of the West. “There’s a deep inferiority complex,” said Ramachandra Guha, a prominent historian and social critic. “Sometimes it manifests itself in excessive deference. At the same time we exalt in cases of success over the white man.”

In that climate, Indian foreign takeovers effectively symbolise the former subject’s becoming master. When Jamsetji Tata, the grandfather of Ratan, sought to stay in a British-run hotel in Mumbai in colonial days, he was refused because he was an Indian. He resolved to start his own Taj Mahal Hotel, which opened in 1903 with German elevators and English butlers. And now, as a fast-growing hotel chain, the Taj has taken control of Western properties like the Pierre in New York, the W in Sydney and-most poetically, perhaps-the St. James Court in London.

It’s a far cry from the days of socialism when currency rules were so tight that Indian managers could not take clients to lunch in New York, much less acquire companies. J.R.D. Tata, Ratan Tata’s late father, once said that thanks to salary caps, the New York cabbie who took him around the city earned more than him despite JRD being the head of India’s then No. 1 private sector company.
India’s corporates have come a long way since then.

“A pulsating, dynamic new India is emerging,” says Bollywood star Amitabh Bachchan in a television ad for a leading Indian newspaper. “An India whose faith in success is far greater than its fear of failure. An India that no longer boycotts foreign-made goods but buys out the companies that make them instead.”