Market Concentration and Firm Performance Analysis in India
School
SDM Institute for Management Development**We aren't endorsed by this school
Course
MBA MARKETING
Subject
Economics
Date
Dec 11, 2024
Pages
98
Uploaded by ConstableRamMaster5767
A Project Report on Analysis of Market Concentration and Firm Performance across B to CSectors in India using the Herfindahl-Hirschman Index (HHI)Submitted by:GROUP-11Abhinav: 23076Chintha Jhanavi: 23016Dhanraj: 23186Jhanavi B S: 23106Pragna P Shetty: 23032Jayanth: 23056Under the guidance of:Dr. Kannadas SAssociate Professor-Accounting & FinanceSDMIMD, MysoreContentsLiterature Review.....................................................................................................1Automotive industry..................................................................................................8Introduction about the company’s:...........................................................................9
The impact of mergers and acquisitions on the Herfindahl-Hirschman Index (HHI) and the post-merger market concentration of companies........................................................16About the Industry..............................................................................................26Market Trends(2019-2020)....................................................................................28About the chosen Top 10 Companies.......................................................................28Methodology.......................................................................................................30Purpose of Data Collection:...................................................................................30Selection Criteria for Companies............................................................................30Rationale for Selection:..........................................................................................30Calculation of HHI for the Years 2019-2023.................................................................31Interpretation of HHI Values:................................................................................32Trends in Market Concentration Over the Period......................................................33Factors Influencing HHI Changes in the Pharmaceutical Industry................................33Case Studies of Key M&A and Their Effect on Market Concentration...........................34How M&A Activities Influence HHI........................................................................35Regulatory Considerations and Antitrust Issues in India.............................................36Economic Benefits of Market Concentration.............................................................36Key Findings......................................................................................................36Recommendations................................................................................................37Managerial implications........................................................................................38Conclusion.........................................................................................................38Telecom Industry....................................................................................................39About the Industry..............................................................................................39About the Selected Companies...............................................................................41Vodafone Idea (Vi): Vodafone Idea Limited Mergers, Acquisitions, and Impact on HHI Index.................................................................................................................43Tata Docomo was a brand under Tata Teleservices, Mergers, Acquisitions, and Impact on HHI Index..........................................................................................................43MTS India was a brand operated by Sistema Shyam Teleservices Ltd (SSTL) Mergers, Acquisitions, and Impact on HHI Index...................................................................44Aircel itself did not merge or get acquired, it filed for bankruptcy in 2018 Impact on HHI Index.................................................................................................................45RCom acquired MTS India Mergers, Acquisitions, and Impact on HHI Index.................45HHI Calculation..................................................................................................46
Interpretation.....................................................................................................47Recommendations................................................................................................49Conclusion.........................................................................................................50Infrastructure industry............................................................................................51About the Industry..............................................................................................51About the Selected Companies...............................................................................52Changes in Market Dynamics Over the Last 5 Years..................................................54Methodology.......................................................................................................55Selection Criteria for Companies............................................................................55Calculation of HHI for the Years 2019-2023..............................................................56Interpretation.....................................................................................................57Analysis of HHI Index for Infrastructure Companies (2019-2023).................................58Trends in market concentration over years...............................................................58Key findings.......................................................................................................60Recommendations................................................................................................60Conclusion.........................................................................................................61Food and Beverage..................................................................................................62About the Industry..............................................................................................62About the Selected Companies...............................................................................62Changes in Market Dynamics Over the Last Five Years..............................................63HHI Index Calculation.........................................................................................63Analysis and Interpretation...................................................................................65Examples of Industries with Varying Concentration...................................................66Interpretation.....................................................................................................66Implications for Competition and Consumer Choice..................................................67Impacts of Market Concentration...........................................................................67Effects on Competition.........................................................................................67Impact on Consumer Choice...............................................................................68Influence on Pricing..........................................................................................68Effect on Innovation..........................................................................................68Regulatory Considerations and Potential Antitrust Concerns.......................................69Industry Comparison: HHI Trends Across B2C Sectors in the Food and Beverage Industry........................................................................................................................69
Implications of Market Concentration.....................................................................70Recommendations................................................................................................70Conclusion.........................................................................................................71Media and Entertainment.........................................................................................71About the Industry..............................................................................................71About the Selected Companies...............................................................................72HHI Index Calculation.........................................................................................74Market cap reaction.............................................................................................76Analysis and Interpretation...................................................................................772022-2023: Sharp Decline in Concentration..............................................................77Comparison with Industry Standards or Benchmarks................................................78Case Studies of Companies or Industries Impacted by High Market Concentration.........79Comparison of HHI Trends Across Different B2C Sectors...........................................79Findings.............................................................................................................80Recommendations................................................................................................81Conclusion.........................................................................................................81References..........................................................................................................83
Executive SummaryThis report delivers an in-depth analysis of the Herfindahl-Hirschman Index (HHI) across six keysectors: Pharmaceuticals, Infrastructure, Automotive, Food and Beverages, Telecommunications, andEntertainment and Media, over the period from 2019 to 2023. By examining market concentrationtrends, the study provides valuable insights into how these industries have evolved in response tovarious economic and competitive pressures. The analysis delves into the significant role mergersand acquisitions (M&A) have played in reshaping the competitive landscape, as companies pursuedstrategies to increase their market share, diversify their product offerings, and improve operationalefficiencies. These strategic consolidations have led to varying degrees of market concentration, withsome sectors experiencing higher levels of dominance by a few key players, while others have seen amore balanced distribution of market power.The Pharmaceutical sector, for instance, witnessed notable consolidation due to the increasingdemand for innovative treatments and cost-effective generic drugs. Companies engaged in M&Aactivities to bolster their research and development capabilities and expand their geographic reach.Similarly, the Telecommunications industry saw significant mergers, driven by the need to expandnetwork infrastructure and adopt new technologies like 5G. The infrastructure sector alsoexperienced a wave of consolidation, as companies sought to enhance their capabilities in projectexecution and management, particularly in response to the growing demand for sustainable andresilient infrastructure.Furthermore, the report examines the impact of regulatory environments and global economicconditions on market concentration. In sectors like Food and Beverages, stringent regulations onhealth and safety, combined with shifting consumer preferences, influenced the competitivedynamics, driving some companies to consolidate to achieve economies of scale. In contrast, theEntertainment and Media sector saw mergers aimed at content acquisition and distributiondominance, as companies responded to the rapidly changing digital landscape. This comprehensiveanalysis underscores the importance of maintaining a balanced competitive environment to fosterinnovation, protect consumer interests, and ensure long-term industry growth across these vitalsectors.
AcknowledgementWe would like to extend our heartfelt gratitude to everyone who contributed to the successfulcompletion of this report. Special thanks to our mentor, whose guidance and insightful feedbackwere invaluable throughout the research process. In particular, we are deeply grateful to KannadasSir for his unwavering support and expert advice, which played a crucial role in shaping the directionand quality of this analysis. His mentorship has been instrumental in helping us navigate thecomplexities of market dynamics across various sectors, and his encouragement pushed us to achieveour best.We are also thankful to the industry professionals who generously shared their expertise, providingvaluable perspectives that enriched our understanding of the market. Additionally, we appreciate thesupport of our family and friends, whose encouragement kept us focused and motivated throughoutthis project. Their unwavering belief in our abilities has been a source of strength, and we are trulygrateful for their constant support in helping us bring this research to completion.
Literature Review1.Supply chain collaboration in the presence of disruptionsThe review of supply chain collaboration in the context of disruptions has been a significant area ofresearch, particularly in recent years. Duong and Chong (2020) provide a comprehensiveexamination of the literature on how supply chain collaborations function under disruptiveconditions. They explore various collaboration mechanisms, the effectiveness of these mechanismsin different disruption scenarios, and the influential factors that facilitate successful collaboration.This review synthesizes findings from 157 papers published since 2000, highlighting key trends,methodologies, and gaps in the research.The authors propose a research framework that categorizes collaboration mechanisms according tothe severity of disruptions and provides recommendations for future research directions. Thethematic analysis in their study identifies that while collaboration is generally beneficial, its successis contingent on the nature of the disruption and the pre-existing relationships between supply chainpartners. Duong and Chong’s (2020) work is instrumental in guiding both academics andpractitioners towards a more resilient supply chain strategy, emphasizing the importance ofpreemptive planning and the need for adaptive collaboration mechanisms in the face of unforeseendisruptions.This literature review forms a foundational understanding of the dynamic and complex nature ofsupply chain management, particularly in how collaboration can mitigate risks and enhance recoveryin disruptive scenarios. The insights provided by Duong and Chong (2020) are pivotal in shapingfuture research and practice in this domain, especially as global supply chains become increasinglyvulnerable to a range of disruption risks.(Chong., 2020)2. Capacity Waste Management in the Indian Automotive IndustryKhanduja, Bawa, and Grover (2016) conducted a critical study on capacity waste managementwithin the Indian automotive industry using Six Sigma methodologies. The research highlights howinefficiencies in capacity utilization lead to significant waste, which in turn affects the overallproductivity and profitability of automotive firms in India. By applying the Define, Measure,Analyse, Improve, Control. process of Six Sigma, the authors identify critical areas where wasteoccurs and propose solutions to optimize capacity management.1
Their study provides a detailed analysis of the challenges faced by the Indian automotive industry,including issues such as overproduction, inventory mismanagement, and underutilization ofresources. The research emphasizes the importance of adopting a systematic approach to wastemanagement, where data-driven decision-making is used to improve operational efficiency.Khanduja et al. (2016) demonstrate the effectiveness of Six Sigma in reducing waste, enhancingproductivity, and ensuring that capacity is utilized optimally within the industry.3. This paper is instrumental in understanding the application of Six Sigma in the context of theIndian automotive sector. It offers valuable insights for both practitioners and researchers interestedin lean manufacturing and process optimization. The findings underline the necessity for continuousimprovement and the adoption of advanced methodologies like Six Sigma to stay competitive in theglobal automotive market.(Dinesh Khanduja, 2016)4.The study "A Critical Analysis of Concentration and Competition in the Indian PharmaceuticalMarket" highlights the complexity of evaluating market concentration in the pharmaceutical industry.The authors argue that the Indian pharmaceutical market, often perceived as highly competitive dueto the presence of numerous firms and formulations, should not be treated as a single, homogeneousmarket. Instead, it is more accurately understood as a collection of various sub-markets, each definedby specific therapeutic classes. Using the Herfindahl-Hirschman Index (HHI) as a measure, the studyfound that while the overall market showed low concentration (HHI = 226.63), narrower definitionsof the market at the formulation level revealed significant concentration, with about 69% of themarket displaying moderate to high concentration.5. This nuanced approach to market analysis is crucial because it acknowledges that patients cannoteasily substitute medications prescribed for specific conditions due to the lack of interchangeableoptions, which is a key factor in determining market power. The findings emphasize the importanceof defining relevant markets with precision, particularly in the pharmaceutical industry where policydecisions related to mergers and acquisitions can have significant implications for public health anddrug affordability in India. The study suggests that a broader view of the market might obscuresignificant competitive dynamics that are only visible when looking at more narrowly defined sub-markets.(Aashna Mehta, 2016)6. The literature review would begin by emphasizing the critical role of intellectual property,particularly patents, in enhancing corporate market value. It would highlight the growing recognitionthat intangible assets, like patents, significantly contribute to the gap between a firm's book value andits market value. Previous studies have underscored the importance of patents as strategic assets,especially in industries like pharmaceuticals, where they protect substantial R&D investments andsecure competitive advantages.2
The review would then delve into the specific patent quality indicators explored in this study, such asrelative patent position (RPP), revealed technology advantage (RTA), the Herfindahl-HirschmanIndex (HHI) of patents, and patent citations. While past research has focused largely on quantitativeaspects of patents, like patent counts, this study identifies a gap in the literature concerning thequalitative aspects of patent performance. By analyzing how these indicators reflect a firm'stechnological leadership, diversity of capabilities, and innovation potential, the review would set thefoundation for understanding their impact on the market value of pharmaceutical companies.(Yu-Shan Chen, 2009)7. This paper discusses the structural changes in the Indian pharmaceutical industry over the pastdecades, particularly focusing on market concentration. The authors highlight that the Indianpharmaceutical sector is highly fragmented, with over 10,000 manufacturing units, where only about5% are organized players. The paper utilizes the HHI to illustrate how market concentration hasevolved, noting that lower HHI values indicate a more diversified market. The findings suggestthat despite the fragmentation, certain segments of the market are dominated by a few large players,leading to higher concentration levels in specific therapeutic areas. (Dr.Murali kallumal)8. Research on the Relationship between the Growth of OTT Service Market and the Changein the Structure of the Pay-TV MarketThis paper examines the competitive landscape between Over-the-Top (OTT) services andpay-TV providers. It analyses the strategies adopted by both sides in the face of the growingpopularity of OTT platforms.The study finds that OTT firms focus on strategies such as localization, partnering with othercompanies, offering differentiated content, increasing revenue, and optimizing their services.Pay-TV providers, on the other hand, respond by expanding their offerings and diversifyingtheir revenue streams.The paper also investigates the impact of these strategies on the pay-TV market. It finds thatthe growth of fixed broadband subscriptions has a significant influence on marketconcentration and cord-cutting, while OTT service revenues have a limited impact.Overall, the paper provides valuable insights into the changing dynamics of the broadcastingindustry and the implications of OTT services for both consumers and businesses. Thegrowth of fixed broadband subscriptions has a significant impact on market concentration andcord-cutting, while OTT service revenues do not have a direct effect.9. Comparative Analysis of Investment Value in the Media and Entertainment IndustryPropelled by technological development, the Media and Entertainment (M&E) industry hasexperienced a remarkable transformation and expansion over the past few decades, giving rise to3
numerous potential investment opportunities. In this context, this essay conducts a comparativeanalysis of value investing in the M&E industry, focusing on Paramount Global, Netflix, FoxCorporation, and The Walt Disney Company. This research utilizes value investing principlesproposed by Benjamin Graham to evaluate the financial strength and profitability of fourresearch subjects. The study suggests Netflix as the most desirable investment due to its robustrevenue growth, EPS projection, and profitability trends while highlighting the fiercecompetition, high valuation risks, and cybersecurity threats faced by Netflix. This paper alsoacknowledges its limitations related to historical data, market dynamics, and quantitativeanalysis. The aim of this study is to explore implying value investing in the M&E industry andprovide investors with a recommendation of the most desirable investment option in this sector.10. The Need for a New Concentration Index for MediaThe paper discusses the evolution of media concentration in the United States since 1988, notingthat while concentration has increased, it remains relatively low by U.S. antitrust standards. TheHerfindahl-Hirschmann Index (HHI) is used to measure market concentration, where an industrywith an HHI below 1,000 is considered unconcentrated. However, the HHI has limitations, as itfocuses solely on market power without considering media pluralism or diversity of voices. Toaddress this, the chapter proposes a new measure called the Media Ownership Concentration andDiversity Index, which combines the HHI with an assessment of the number of distinct voices inthe media market. This index accounts for both concentration and diversity, offering a morecomprehensive measure of media concentration by reflecting how concentration impacts thevariety of voices available to the public.11.Evolution of the Indian Telecom IndustryA significant, evolving from a state-controlled monopoly to a competitive and dynamic sector. In theearly 1990s, the Indian government-initiated liberalization policies, which led to the entry of privateplayers and the gradual dismantling of the monopoly held by the Department of Telecommunications(DoT). The National Telecom Policy of 1994 marked a significant milestone, paving the way forprivate sector participation in both basic and value-added services. This era also witnessed theintroduction of mobile telephony, which revolutionized communication in India. Scholars such asSharma (2008) have emphasized the role of regulatory reforms in fostering competition and drivinggrowth in the industry. By the early 2000s, the industry had seen the entry of global giants and theestablishment of a competitive market structure, leading to rapid subscriber growth, particularly inmobile services4
12. Impact of Regulatory Policies on Telecom GrowthRegulatory policies have trajectory. The literature underscores the importance of policy interventionsin ensuring a competitive market environment. The Telecom Regulatory Authority of India (TRAI),established in 1997, has been instrumental in promoting transparency, fairness, and competition inthe sector. Studies by Gupta (2010) and Rao (2012) have examined the impact of regulatorymeasures such as spectrum auctions, interconnection usage charges, and mobile number portabilityon market dynamics. Gupta (2010) argues that spectrum auctions, while ensuring efficient allocationof resources, have also led to significant financial stress for telecom operators, affecting theirprofitability and investment capacity. Rao (2012) highlights the positive impact of mobile numberportability on consumer choice and competition, leading to improved service quality and reducedtariffs. However, the literature also points to challenges such as regulatory uncertainty and the needfor a balanced approach that fosters innovation while protecting consumer interests. The ongoingdebate around net neutrality, data privacy, and the regulatory framework for emerging technologieslike 5G further illustrates the critical role of regulation in the telecom sector.13. Technological Advancements and Their Impact on Telecom ServiceTechnological advancements have been a driving force behind the telecom industry's evolution, witheach new generation of technology bringing about significant changes in service offerings andconsumer behaviour. The literature extensively covers the transition from 2G to 3G, and later to 4G,highlighting the impact of these technologies on data consumption, service quality, and marketcompetition. Kumar (2015) notes that the introduction of 4G technology marked a paradigm shift,enabling high-speed facilitating the growth of data-driven services such as video streaming, onlinegaming, and mobile commerce. The literature also discusses the challenges associated withtechnology adoption, including the high cost of network infrastructure, the need for spectrumavailability, and the competitive pressure to continuously innovate. Furthermore, the anticipatedrollout of 5G technology is expected to bring about even more profound changes, enabling ultra-lowlatency, massive connectivity, and the proliferation of Internet of Things (IoT) devices. Scholars suchas Singh and Verma (2018) have explored the potential of 5G to transform industries beyondtelecom, including healthcare, manufacturing, and transportation, thus positioning the telecomindustry as a critical enabler of the digital economy.14. In the infrastructure industry, including utilities, transport, and telecommunications, theHerfindahl-Hirschman Index (HHI) serves as a valuable tool for evaluating market competition. Forexample, in electricity markets, HHI helps assess market concentration levels and the effects ofregulatory changes or privatization. Similarly, in telecommunications, HHI sheds light on howmergers and competition policies influence market dynamics (Smith & Wilson, 2022).15. Applying HHI to infrastructure sectors presents challenges. These industries often have few largeplayers due to high capital costs and regulatory restrictions, which can skew HHI results. Therefore,it is crucial to account for sector-specific factors like service delivery models, regulatoryframeworks, and market dynamics. Additionally, HHI does not reflect service quality or the broaderimpacts of regulatory policies beyond market concentration (Jones, 2023).5
16. Empirical research shows varied applications of HHI across different infrastructure sectors. Forinstance, studies in the energy sector indicate that high HHI values are linked to reduced competitionand higher consumer prices, highlighting the importance of regulatory oversight. Conversely, intelecommunications, high HHI values may coexist with competitive behaviors, driven bytechnological advances and service diversification (Lee, 2023).17. Market Concentration and Its ImpactThe concept of market concentration has been extensively studied in industrial organizationeconomics, with the Herfindahl-Hirschman Index (HHI) being a widely used measure. Bain'sseminal work (1956) on barriers to entry highlighted how high concentration levels often lead tomonopolistic or oligopolistic market structures, reducing competition and potentially leading tohigher prices and reduced consumer welfare. Scherer and Ross (1990) further elaborated on this bydemonstrating that high concentration often results in reduced innovation and efficiency withinindustries.In the food and beverage sector, market concentration is particularly important because it affectsproduct diversity, pricing strategies, and consumer choice. As this industry is heavily influenced bybrand loyalty and economies of scale, larger companies often dominate, which can lead to higherHHI values. Studies have shown that in highly concentrated markets, such as those with an HHIabove 2,500, a few firms tend to exert significant control, potentially leading to anti-competitivepractices (Rhoades, 1993).18. The Role of Mergers and AcquisitionsMergers and acquisitions (M&A) are critical mechanisms through which market concentrationevolves. Gaughan (2015) provides a comprehensive overview of M&A activities, emphasizing theirrole in achieving corporate growth, diversification, and economies of scale. In the context of the foodand beverage industry, M&A often serve as a strategy for companies to enhance their market power,expand their product portfolios, and enter new markets.Weston et al. (2003) discuss the impact of M&A on market structure, highlighting that while M&Acan lead to efficiency gains and improved competitiveness, they also risk increasing marketconcentration to levels that could harm competition. This duality is particularly evident in the foodand beverage industry, where M&A activities have historically led to both industry consolidationand, at times, regulatory concerns.20. Case Studies and Empirical EvidenceEmpirical studies have shown varying effects of M&A on market concentration in the food andbeverage sector. For example, a study by Euromonitor International (2021) highlights how majoracquisitions by global food giants have led to increased concentration in key markets, particularly inpackaged foods and beverages. These findings are consistent with earlier studies that indicate acorrelation between M&A activity and rising HHI values.However, not all M&A activities result in increased concentration. Deloitte (2021) reports that insome cases, particularly where market entry barriers are lower, M&A can lead to increased6
competition as new players emerge or smaller firms gain market share through innovative practices.This suggests that the impact of M&A on market concentration is context-dependent, varying byindustry segment and market conditions. (www2.deloitte.com, 2021)21. Regulatory and Competitive ImplicationsThe increasing concentration in the food and beverage industry has not gone unnoticed by regulators.The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) use the HHI as akey tool in assessing the potential anti-competitive effects of M&A. The DOJ’s guidelines suggestthat mergers resulting in HHI increases above certain thresholds may warrant closer scrutiny or bechallenged if they are likely to significantly reduce competition (DOJ, 2010).Moreover, the literature suggests that while high concentration can lead to efficiencies, it can alsostifle competition and innovation (Scherer & Ross, 1990). As a result, there is a growing call formore nuanced regulatory approaches that balance the benefits of consolidation with the need tomaintain competitive markets.22. Industry-Specific DynamicsThe food and beverage industry is characterized by its unique dynamics, such as brand loyalty,economies of scale, and regulatory challenges related to health and safety standards. These factorsmake the industry particularly susceptible to high concentration levels following M&A activities.McKinsey & Company (2021) discuss the future of the food industry, noting that while consolidationcan lead to operational efficiencies, it can also reduce the diversity of products available toconsumers and limit the market entry of smaller, innovative firms.NielsenIQ’s (2021) analysis of global consumer trends further supports this view, indicating thatconsumer preferences are shifting towards healthier, more diverse food options. This trend couldpotentially counteract some of the concentration effects, as new entrants focusing on niche marketsmay gain market share, thereby reducing overall concentration. ( nielseniq.com, 2021)7
Automotive industry(Source: https://auto.economictimes.indiatimes.com/news/industry/)Figure 1. Domestic sales passenger vehicles since 2019 to 2023India's automobile industry plays a crucial role in the national economy, contributing over 7% to theGDP. The sector has experienced rapid expansion, fueled by factors like higher disposable incomes,growing urbanization, and an expanding middle class, leading to a surge in demand for personalvehicles. The government has also introduced several measures to boost manufacturing andsustainability within the industry, such as the Production-Linked Incentive (PLI) scheme, which aimsto strengthen domestic production and attract foreign investments. As a result, India has emerged as aleading global automotive market, featuring a wide variety of vehicles, including two-wheelers,passenger cars, and commercial vehicles.(auto.economictime, 2024)(Source: https://startuptalky.com/indian-automobile-industry/)Figure 2. Indian Automobile Market since 2019 to 20238
Over the years, the Indian automotive sector has evolved rapidly, transitioning from primarilymanufacturing traditional internal combustion engine vehicles to embracing electric vehicles (EVs).The push towards EVs is fueled by environmental concerns and government incentives aimed atreducing carbon emissions. Major automotive companies are investing heavily in research anddevelopment to innovate and produce electric models, which is expected to reshape the industry inthe coming years. This transition not only promises to reduce pollution but also aims to create newjob opportunities in the green technology sector.Moreover, the rise of startups within the automotive space is noteworthy. These companies areleveraging technology to offer innovative solutions ranging from electric mobility to smart vehiclefeatures. The startup ecosystem in India is thriving, with numerous firms focusing on enhancingvehicle safety, efficiency, and user experience through advanced technologies like AI and IoT. Thisinflux of startups is expected to drive competition and foster innovation, further propelling thegrowth of the automotive industry.(startuptalky, n.d.)(Source: https://startuptalky.com/indian-automobile-industry/)Figure 3. Passenger vehicle Market shareIndian Automotive industry: The report will analyse the market share data of the following tencompanies - Maruti Suzuki, Hyundai Motor Company, Tata Motors, Mahindra & Mahindra, ToyotaMotor Corporation, Kia Corporation, Honda, MG Motor, Skoda Auto, and Volkswagen to calculatethe Herfindahl-Hirschman Index (HHI). (startuptalky, 2020)Introduction about the company’s:Maruti Suzuki:9
Maruti Suzuki India Limited, based in New Delhi, is the foremost automobile manufacturer in India.Founded in 1981 as a joint venture between the Government of India and Suzuki Motor Corporationof Japan, it became a subsidiary of Suzuki Motor Corporation in 2002. The company holds a leadingposition in the Indian passenger car market and operates several manufacturing facilities in Gurgaon,Manesar, and Gujarat, producing a wide array of vehicles, from hatchbacks to SUVs. Additionally,Maruti Suzuki has a Research and Development centre in Rohtak, Haryana, focusing on vehicledesign, engineering, and the development of new technologies.Maruti Suzuki has consistently reported annual revenues surpassing 90,000 crores (~$11 billion),₹solidifying its status as a key player in the Indian automotive industry. The company exports vehiclesto over 100 countries, maintaining a robust presence both domestically and internationally. Led byHisashi Takeuchi, the current Managing Director and CEO, Maruti Suzuki continues to focus oninnovation, enhancing production capacity, and increasing localization to stay competitive on aglobal scale. As of 2023, the company employs over 33,000 people and remains dedicated toadvancing technological innovations and meeting customer demands.Hyundai Motor Company:Hyundai Motor Company has established itself as a major force in the Indian automotive industrythrough its wholly-owned subsidiary, Hyundai Motor India Limited (HMIL). Since entering theIndian market in 1996, Hyundai has risen to become the second-largest car manufacturer in thecountry, offering a diverse range of vehicles that cater to various segments, including hatchbacks,SUVs, and electric vehicles.Hyundai's product lineup in India features popular models such as the Hyundai Creta, Venue, and thenewly introduced Ioniq 5 electric SUV. The company has been at the forefront of incorporatingadvanced technology and eco-friendly practices, with a strong emphasis on sustainability andinnovation. This commitment to electric mobility is exemplified by the launch of the Hyundai Ioniq5.10
Beyond its wide vehicle range, Hyundai is also well-known for its extensive sales and servicenetwork, ensuring a strong presence across India. The company’s focus on customer satisfaction,combined with strategic initiatives like the "Click to Buy" online platform, demonstrates itsresponsiveness to evolving market trends and consumer needs. Hyundai’s success in India stemsfrom its ability to seamlessly integrate global standards with local preferences, earning the trust ofIndian consumers. The company continues to expand its presence in the Indian market, prioritizinginnovation, sustainability, and a customer-centric approach.Tata motors:Tata Motors Limited, headquartered in Mumbai, India, is a prominent multinational automotivemanufacturer established in 1945. As a key subsidiary of the Tata Group, Tata Motors is one of theworld's largest manufacturers of cars and commercial vehicles, with a diverse portfolio that includespassenger cars, trucks, buses, SUVs, and electric vehicles under brands like Tata, Daewoo, and Fiat.The company operates several manufacturing and assembly plants across India in locations such asJamshedpur, Pantnagar, Lucknow, Sanand, Pune, and Dharwad, while its R&D centers are situated inPune, Jamshedpur, and Lucknow.As of 2024, Tata Motors employs approximately 91,811 people, reflecting its significant role as amajor employer in the Indian economy. The company contributes substantially to the nation'seconomic strength, generating wealth and supporting infrastructure. Notably, Tata Motors, along withother Tata companies, contributed 47,196 crore in taxes in 2017, which accounted for 2.24 percent₹of the total tax collection by the government of India. This highlights the company's role as aneconomic backbone, reinforcing its importance not just as an industrial giant but also as a criticalplayer in national economic development.Tata Motors' strategic focus, known as the "New Forever" vision, emphasizes sustainable mobilitysolutions, aiming to revolutionize the automotive sector with innovative, eco-friendly vehicles. Thecompany reported annual revenues of over $10 billion and has a global footprint with operationsspanning across India, Europe, Africa, the Middle East, and Southeast Asia. Led by CEO and11
Managing Director Girish Wagh, Tata Motors continues to drive forward its vision of deliveringworld-class automotive solutions while contributing significantly to the Indian economy.Mahindra & Mahindra:Mahindra & Mahindra Limited (M&M) is one of India's leading multinational conglomerates with astrong presence in the automotive industry. Established in 1945, the company is headquartered inMumbai and has diversified interests in automotive, farm equipment, IT, financial services, andmore. In the automotive sector, Mahindra is particularly known for its robust portfolio of SUVs,commercial vehicles, and electric vehicles, with brands like Thar, Scorpio, and XUV500 beinghousehold names in India.Mahindra's automotive division has seen consistent growth, especially in the utility vehicle (UV)segment. In Q3 of FY24, the company achieved its highest-ever volumes with 211,000 units sold,reflecting a 20% increase year-over-year. The UV segment alone saw volumes of 119,000 units,cementing Mahindra's position as a market leader with a revenue market share of 21% in SUVs. Thecompany's focus on innovation and sustainable mobility is evident in its leadership in the electricthree-wheeler (E-3W) market, where it holds a commanding market share of 59.5% year-to-date.As of 2024, Mahindra & Mahindra employs around 30,000 people in its automotive division,contributing significantly to the Indian economy. In FY23, the Mahindra Group reportedconsolidated revenues of 55,248 crore, with a net profit of 3,369 crore. The company is₹₹committed to creating wealth for the nation, contributing 47,196 crore in taxes to the government of₹India in 2017, which accounted for 2.24% of the total tax collection. Mahindra & Mahindra'sintegrated approach across its diverse business verticals and its ongoing investments in R&D andtechnology ensure that it remains a formidable player in the Indian and global automotive markets.The company is well-positioned to continue its growth trajectory, driven by its focus on customer-centric innovation and sustainable development.12
Toyota Motor Corporation (India)Toyota Motor Corporation, operating in India as Toyota Kirloskar Motor (TKM), has establisheditself as a key player in the Indian automotive market. Headquartered in Bengaluru, TKM wasfounded in 1997 as a joint venture between Toyota Motor Corporation (Japan) and Kirloskar SystemsLimited (India), with Toyota holding an 89% stake.TKM has made significant strides in the Indian market, particularly in recent years. The companyoperates two manufacturing plants in Bidadi, Karnataka, with a combined production capacity of upto 342,000 units annually. These facilities produce popular models like the Innova HyCross, InnovaCrysta, Fortuner, Urban Cruiser Hyryder, and Camry Hybrid, among others. The company has beenactively involved in the "Make in India" initiative, contributing to local manufacturing andemployment generation, with an employee count of approximately 7,000.In 2023, Toyota Kirloskar Motor achieved its highest-ever monthly sales in May, with 20,410 unitssold, marking a significant growth of 110% compared to May 2022. TKM announced a regionalrestructuring effective from January 2024, positioning India as a crucial hub within Toyota's newlyformed "India, Middle East, East Asia & Oceania" region. This restructuring underscores theincreasing importance of the Indian market in Toyota's global strategyKia Corporation:13
Kia Corporation has quickly established itself as a prominent player in the Indian automotive marketsince its entry in 2019. With a state-of-the-art manufacturing plant in Anantapur, Andhra Pradesh,Kia has committed to the "Make in India" initiative, investing approximately USD 2 billion tosupport local production. This facility has an annual production capacity of 300,000 units, allowingKia to offer a diverse range of vehicles tailored specifically for Indian consumers. Popular modelssuch as the Kia Seltos, Kia Sonet, Kia Carens, and the electric Kia EV6 have gained significantpopularity due to their advanced features and technology. Kia's extensive network of over 350touchpoints across more than 200 cities, including tier-3 and tier-4 towns, underscores its strategy tomake its vehicles accessible to a wider audience. Moving forward, Kia India aims to expand itsproduct lineup and introduce new segments, reinforcing its commitment to innovation and customer-centricity within the Indian automotive sectorHonda Motors:Honda Cars India Ltd. (HCIL) has solidified its presence as a leading manufacturer of premium carsin India. Established as a wholly-owned subsidiary of Honda Motor Co., Ltd., HCIL has becomesynonymous with quality and reliability in the Indian automotive market. The company's productlineup includes popular models such as the Honda City, Amaze, WR-V, and the recently launchedHonda Elevate, a global mid-size SUV that made its world debut in India. This launch underscoresHonda's strategy to use India as a key market for new global models.Honda's manufacturing operations in India are centered around its state-of-the-art facility inTapukara, Rajasthan, which has been a hub for producing not just for the domestic market but alsofor export purposes. Honda has made significant strides in increasing its export volumes, recording a17% growth in export volumes for the fiscal year 2022-2023. As of 2024, Honda's commitment tothe Indian market remains strong, as evidenced by its sustained growth in domestic sales andongoing investments in new product development 14
MG Motor India:MG Motor India, a subsidiary of the Chinese automaker SAIC Motor Corporation, entered the Indianautomotive market with a focus on introducing innovative and technologically advanced vehicles.Established in 2017, MG quickly made its mark with a range of SUVs and electric vehicles,including the MG Hector, ZS EV, and Astor. In 2023, MG showcased its hydrogen fuel-celltechnology at the Auto Expo, underlining its commitment to green mobility. This partnership isexpected to enhance local production and expand MG’s footprint in the Indian marketSkoda Auto India:Skoda Auto India, a subsidiary of the Czech automobile manufacturer Skoda Auto, is part of theVolkswagen Group. Skoda entered the Indian market in 2001 and has since developed a reputationfor its European engineering and premium offerings. The company operates manufacturing facilitiesin Pune and Aurangabad and offers a range of vehicles, including the Skoda Octavia, Superb, andKushaq. Skoda has focused on expanding its market presence in India through the India 2.0 project,which aims to localize production and increase market share. Volkswagen India:15
Volkswagen India, a subsidiary of the German automotive giant Volkswagen AG, began operations inIndia in 2007. The company is known for its high-quality engineering and German craftsmanship,offering a range of vehicles including the Volkswagen Polo, Vento, and Taigun. Volkswagen operatesa manufacturing plant in Pune, where it produces vehicles for both the domestic and export markets.In recent years, Volkswagen has focused on increasing its market share in India by introducing morelocalized and affordable models under its India 2.0 strategy. The brand is also committed tosustainability, with plans to expand its electric vehicle lineup in the Indian market.The impact of mergers and acquisitions on the Herfindahl-Hirschman Index (HHI) and thepost-merger market concentration of companies.Mahindra & Mahindra: Mergers, Acquisitions, and Impact on HHI Index (2019-2023)Between 2019 and 2023, Mahindra & Mahindra (M&M) engaged in several strategic mergers andacquisitions, significantly impacting the automotive industry. One notable development was theproposed joint venture between Mahindra and Ford Motor Company, where M&M planned toacquire a 51% controlling stake in Ford’s India operations. This venture aimed to strengthenMahindra's presence in the SUV market and leverage Ford's global reach. However, the deal waseventually called off in 2021 due to challenges in the global automotive landscape, exacerbated bythe COVID-19 pandemic.Despite the cancellation, Mahindra continued to focus on its core competencies in the SUV segment,launching several new models under its aggressive five-year turnaround plan. This included theintroduction of the Thar, XUV700, and Bolero Neo, among others. The company's strategic focus on"authentic SUVs" has been central to its approach, as it aimed to reclaim its market share by notmerely competing but by creating a distinct product category.The impact of these developments on the Herfindahl-Hirschman Index (HHI) for the Indianautomotive industry has been nuanced. Initially, the potential joint venture with Ford could haveincreased market concentration, thereby raising the HHI. However, with the deal's cancellation,Mahindra’s individual market share remained the focus. The introduction of new models helped thecompany stabilize its market presence, but Mahindra’s market share saw fluctuations during thisperiod. The competitive landscape, dominated by players like Maruti Suzuki, Hyundai, and Kia,meant that while Mahindra remained a significant player, the HHI for the industry reflected amoderately concentrated market, with no single player holding a dominant position.(Ford, 2019)16
Overall, while Mahindra & Mahindra's strategic initiatives have kept it relevant in a highlycompetitive market, the dynamic shifts in the industry have underscored the challenges ofmaintaining market share amidst fierce competition.Maruti Suzuki and Toyota Motors: Strategic Partnership and Its Impact on HHIBackground of the Strategic PartnershipIn 2017, Maruti Suzuki and Toyota Motor Corporation entered a strategic partnership aimed atmutual collaboration in the areas of vehicle production and the development of hybrid and electricvehicles. The partnership was not a typical merger or acquisition but rather a strategic alliance thatallowed both companies to leverage each other's strengths. Toyota provided its expertise in hybridtechnology, while Maruti Suzuki contributed its deep understanding of the Indian market and itsextensive distribution network.This collaboration led to cross-badging of certain models, where vehicles like the Maruti SuzukiBaleno were rebadged and sold as the Toyota Glanza, and the Vitara Brezza was rebadged as theToyota Urban Cruiser. The goal was to expand the product portfolio of both companies and increasemarket penetration, particularly in the small car segment, where Maruti Suzuki had a stronghold.(startuptalky, 2020)Post-Partnership PerformancePost-partnership, both companies saw a significant impact on their product offerings and marketpresence. Maruti Suzuki benefited from the association by enhancing its capabilities in hybrid andelectric vehicle technology, areas where it had limited expertise. On the other hand, Toyota gainedaccess to the Indian market's mass segment, which was traditionally dominated by Maruti Suzuki.The introduction of shared models like the Glanza and Urban Cruiser helped Toyota to increase itsmarket share in India without having to invest heavily in developing new models specifically for theIndian market. For Maruti Suzuki, this partnership was an opportunity to stay competitive in theevolving market, particularly as the industry began shifting towards hybrid and electric vehicles.Impact on HHI IndexThe Herfindahl-Hirschman Index (HHI) in the Indian automotive industry was influenced by thisstrategic partnership, though not as dramatically as it would have been by a full-fledged merger oracquisition. The collaboration did lead to an increase in market concentration in certain segments,17
particularly in the compact car and SUV segments where both companies had a presence. However,since the companies remained separate entities with distinct brands and operations, the overallimpact on the HHI was moderate.The alliance allowed both companies to consolidate their positions in the market withoutsignificantly altering the competitive dynamics. The cross-badging strategy meant that while thecompanies shared technology and platforms, they continued to compete against each other in themarketplace, which helped maintain a balanced market structure.(economictimes, 22/7/2024)(indiatoday, 2023)HHI Index Calculation:SquaringYearHHIindexvalue2023247218
20222483202125282020337520192990Interpretation:Herfindahl-Hirschman Index (HHI) InterpretationThe HHI is a measure of market concentration, calculated by summing the squares of the marketshares of all firms in the industry. It helps in understanding the level of competition within anindustry:HHI < 1,500: Indicates a competitive industry.HHI between 1,500 and 2,500: Indicates moderate concentration.HHI > 2,500: Indicates high concentration.HHI Calculation Results:2023: 2,4722022: 2,4832021: 2,5282020: 3,3752019: 2,990Year-on-Year Market Cap Reaction and HHI Interpretation:1.2019: The HHI was 2,990, still indicating high concentration but slightly less than in 2020.Maruti Suzuki had a market share of 50.60%, and Hyundai had 17.40%. The reduction inMaruti Suzuki's share compared to 2020 slightly reduced concentration but still indicated ahigh level of dominance by a few firms.2.2020: The HHI was 3,375, indicating a highly concentrated market. Maruti Suzuki had asignificant market share of 54.16%, and Hyundai Motor Company had 18.68%. These twocompanies together dominated the market, leading to high concentration. The market was lesscompetitive, with a few firms holding most of the market share.19
3.2021: The HHI dropped to 2,528, still in the high concentration range, but this reductionindicates that the market became slightly more competitive compared to 2019 and 2020.Maruti Suzuki's market share decreased to 45.61%, and Hyundai also saw a slight reduction.Tata Motors and Mahindra & Mahindra gained market share, indicating some redistributionof market power.4.2022: The HHI further reduced to 2,483, moving closer to moderate concentration. MarutiSuzuki's market share was stable at 44.25%, but other players like Tata Motors and Mahindra& Mahindra increased their shares, which slightly decreased the dominance of the top twofirms, improving competition.5.2023: The HHI dropped to 2,472, continuing the trend towards moderate concentration.Maruti Suzuki and Hyundai's shares slightly decreased, and Tata Motors and Kia Corporationfurther increased their market presence, suggesting a more balanced competitiveenvironment.Market Cap Reaction:2019-2020: The market was highly concentrated with dominance by Maruti Suzuki andHyundai. As a result, the market cap for these companies likely remained strong, reflectingtheir dominant positions.2021-2023: As the market became more competitive, with HHI reducing each year, themarket cap growth would likely have been more evenly distributed among companies likeTata Motors, Mahindra & Mahindra, and Kia Corporation. The slight reduction in MarutiSuzuki's and Hyundai's dominance could have moderated their market cap growth ratescompared to the earlier years.Conclusion:The HHI values from 2019 to 2023 show a clear trend of decreasing market concentration, indicatingan increasingly competitive market. While Maruti Suzuki and Hyundai Motor Company remaineddominant, their market shares gradually decreased, allowing other players to gain a larger foothold.This shift suggests a more competitive environment where market cap growth is likely becomingmore evenly distributed among the top firms.Analysis and InterpretationTrends in Market Concentration Over the Years:20
The HHI calculations from 2019 to 2023 indicate trends in market concentration within theautomotive industry. For example, if the HHI values show a consistent increase, this suggestsa trend toward higher market concentration, potentially indicating that larger companies areconsolidating their market power. Conversely, decreasing HHI values would suggest a morecompetitive market with reduced concentration.Impact of Mergers, Acquisitions, or Exits on HHI Values:Significant M&A activities within this period, such as mergers or acquisitions among majorautomotive players, would directly impact the HHI values. For instance, the acquisition of acompetitor could lead to an increase in HHI, reflecting reduced competition. The exit of amajor player would similarly affect the index, possibly increasing it if fewer competitorsremain or decreasing it if new entrants fill the gap.Examples of Industries with Increasing or Decreasing Concentration:The automotive industry is an example where market concentration can increase due tostrategic mergers, as seen in some of the companies you've analysed. In contrast, industrieslike consumer electronics might show decreasing concentration due to new market entrantsand rapid technological innovation that reduces barriers to entry.Comparison with Industry Standards or Benchmarks:Comparing the calculated HHI values with industry standards (typically, an HHI below 1,500indicates a competitive market, 1,500-2,500 a moderately concentrated market, and above2,500 a highly concentrated market) will help determine the level of market concentration inthe automotive industry relative to broader benchmarks.Impacts of Market ConcentrationEffects on Competition and Consumer Choice:Higher market concentration (as indicated by a rising HHI) often reduces competition, whichcan lead to fewer choices for consumers, higher prices, and potentially lower qualityproducts. This can be particularly significant in the automotive industry, where fewercompetitors can control more market share.Influence on Pricing and Innovation:21
Increased concentration might lead to higher pricing power for dominant firms, potentiallyleading to higher prices for consumers. However, it can also reduce the incentive forinnovation, as companies may feel less pressure to innovate in a less competitive market. Onthe other hand, some companies might still innovate aggressively to differentiate themselvesand justify higher prices.Regulatory Considerations and Potential Antitrust Concerns:High market concentration can trigger regulatory scrutiny. Antitrust authorities might beconcerned if HHI values suggest that competition is being stifled, which could lead tointerventions, such as blocking mergers or mandating divestitures. Understanding thesepotential regulatory challenges is crucial for companies considering further M&A activities.Case Studies of Companies or Industries Impacted by High Market Concentration:Maruti Suzuki Case Study Impacted by High Market Concentration:High market concentration within the Indian automotive industry, Maruti Suzuki emerges as apivotal case study. The company's longstanding dominance in the market, particularly in thepassenger vehicle segment, has played a significant role in shaping the Herfindahl-Hirschman Index(HHI) over the years. Maruti Suzuki's strategic decisions, including maintaining a stronghold in thecompact and mid-sized car segments, have contributed to elevated HHI values, indicating a reductionin market competition. The company's exit from the diesel car segment in 2019 and its focus onsmall petrol and hybrid vehicles are examples of strategic makeovers that have reinforced its marketposition, further impacting the HHI by consolidating its share in key segments.The limited merger and acquisition (M&A) activities among other major players, such as HyundaiMotor India and Tata Motors, have allowed Maruti Suzuki to maintain its leadership, leading to ahigher concentration of market power in a few companies. This situation reflects a broader trend ofincreased market concentration in the Indian automotive sector, where a few dominant playerscontrol a significant portion of the market, leading to potential concerns around competition andconsumer choice.(Resht)Examples of Market Concentration in B2C IndustriesSpecific Examples of Companies or Sectors with Significant HHI Changes:22
Highlights significant HHI changes within the automotive sector, driven by M&A activitiesor market exits. For example, the increase in HHI for Tata Motors following its acquisition orconsolidation activities could be a significant shift, altering the competitive landscape.Analysis of the Reasons Behind These Changes:Strategic reasons such as gaining market share, expanding product lines, or acquiring criticaltechnology might drive these changes. Analysing the motivations behind mergers, like TataMotors' strategy, will help understand the broader implications for market concentration.Potential Future Scenarios Based on Current Trends:If the current trends of increasing HHI continue, the automotive industry might face reducedcompetition, leading to potential regulatory interventions or a slowdown in innovation.Conversely, if new entrants or technological disruptions occur, the market might see adecrease in concentration, leading to more competitive dynamics.Industry ComparisonComparison of HHI Trends Across Different B2C Sectors:Comparing HHI trends across various B2C sectors, such as consumer electronics or retail,can provide insights into how unique or common the trends in the automotive sector are. Thiscomparison might reveal whether the automotive industry's concentration trends are part of abroader market consolidation or an isolated case.Identification of Broader Market Trends:Broader market trends, such as globalization, technological advancements, and changingconsumer preferences, play a significant role in shaping HHI values. Identifying these trendswill help contextualize the changes in the automotive industry's market concentration.Insights Gained from the Comparative Analysis:The comparative analysis might reveal that the automotive industry is particularly susceptibleto M&A-driven concentration due to high entry barriers, substantial capital requirements, andthe importance of brand loyalty. These insights could be crucial for predicting future marketdynamics and planning strategic actions.Recommendations for the Automotive Industry23
The analysis of the Herfindahl-Hirschman Index (HHI) among the ten major automotive companiesin India highlights significant insights regarding market concentration and competition. To navigatethese dynamics effectively, companies should consider several strategic recommendations aimed atfostering growth and resilience.Fostering Strategic Partnerships: One of the most effective ways to enhance competitivenessis through strategic partnerships. The collaboration between Maruti Suzuki and Toyotaexemplifies how firms can leverage each other's strengths to expand market reach withoutincurring heavy costs. Other companies in the automotive sector should seek similaralliances, particularly in the development of electric and hybrid vehicles. By poolingresources and expertise, companies can accelerate innovation and better respond to evolvingconsumer demands and regulatory pressures.Investing in Research and Development: As the automotive landscape shifts towardssustainability, prioritizing research and development is crucial. Companies should allocatesignificant resources to innovate in areas such as electric mobility and advanced technologies.This commitment to R&D not only helps companies comply with environmental standardsbut also positions them as leaders in the green technology space. By focusing on innovation,firms can differentiate their offerings and improve customer satisfaction, ultimatelyenhancing their market share.Enhancing Operational Efficiency: Improving operational efficiency through advancedmanufacturing techniques and data analytics is vital for maintaining competitiveness.Implementing methodologies like Six Sigma can help identify inefficiencies and streamlineproduction processes. By minimizing waste and optimizing resource utilization, companiescan reduce costs and boost profitability. This operational excellence will be essential ascompetition intensifies, particularly with the rise of new entrants in the market.Exploring Market Diversification: To mitigate risks associated with market fluctuations,automotive companies should consider diversifying their product lines and exploring newmarkets. This could involve venturing into emerging segments, such as electric scooters orautonomous vehicles. By broadening their offerings, companies can tap into new revenuestreams and reduce dependency on traditional vehicle sales.Emphasizing Customer-Centric Strategies: A strong focus on understanding and meetingcustomer needs is paramount. As consumer preferences evolve, automotive firms mustprioritize gathering feedback and utilizing data analytics to tailor their products and services.24
This customer-centric approach not only fosters brand loyalty but also drives sales growth ina competitive environment.Challenges and Trends in the Indian Automotive Industry: A Response to Recent Sales DeclinesGlobal Trends and the Indian Market: The decline in India's car sales is part of a broader global trend affecting the automotive sector.Various markets worldwide are experiencing similar challenges, including shifts in consumerpreferences, economic pressures, and supply chain disruptions. This global context suggests that theissues faced by the Indian automotive industry are not isolated, and solutions may require bothdomestic adjustments and consideration of global market dynamics.India's automotive industry is currently facing significant challenges due to tighter financialregulations during the election period and adverse weather conditions, such as the ongoing heatwave,which have reduced consumer spending and dealership traffic. This has resulted in a sharp decline incar sales and an accumulation of over 730,000 unsold vehicles at dealerships, leading to tensionsbetween manufacturers and dealers. These challenges are part of a broader global trend affecting theautomotive sector, with similar declines observed in other markets. However, there is hope that theupcoming festival season in India could revive sales, as consumer sentiment typically improvesduring this period. Key players like Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai,and Toyota are all impacted by these market dynamics, with each company needing to adapt theirstrategies to address excess inventory and shifting consumer demands. Addressing these issues willrequire a concerted effort from both manufacturers and dealers to realign production levels withmarket demand and to prepare for potential market recovery during the festive season.(businesstoday, 2024)25
Pharmaceutical IndustryAbout the IndustryThe pharmaceutical industry is a vital component of the global healthcare system, responsible fordeveloping, manufacturing, and distributing essential drugs and medicines that save and improvelives worldwide. This heavily regulated sector includes companies engaged in research, production,and marketing of pharmaceuticals, ranging from over-the-counter remedies to innovative prescriptiontreatments and biologics. India has emerged as a global leader in the industry, supplying over 20% ofthe world's generic drug demand and earning the title "pharmacy of the world" through its high-quality, affordable medicines exported to over 200 countries. Factors driving the industry's growthinclude rising chronic diseases, an expanding middle class, and improving healthcare infrastructure,supported by India's robust pharmaceutical manufacturing base and chemical industry.(https://en.wikipedia.org/wiki/Pharmaceutical_industry_in_India, n.d.)(DGCI&S, 2023)India holds a 5.71% share in the global pharmaceutical market, with exports reaching US$ 25.02billion in FY24 (up to February 2024). Formulations and Biologics constitute 72.54% of theseexports. Major export destinations include the USA, Belgium, South Africa, the UK, and Brazil.26
India leads globally with the highest number of USFDA-compliant plants outside the USA, and eightof the top 20 global generic drug companies are Indian. Additionally, India supplies 65-70% of theWorld Health Organization's vaccine requirements.Fragmentation in the Pharmaceutical IndustryThe pharmaceutical industry is highly fragmented, characterized by numerous companies acrossvarious therapeutic areas, preventing any single company from dominating the market. Thisfragmentation is particularly evident in the generic drug segment, where multiple manufacturersproduce related products, intensifying competition. Factors contributing to this fragmentation includediverse product portfolios, stringent regulatory environments, and the global reach of the industry.Pharmaceutical companies often specialize in specific therapeutic areas, such as oncology orcardiovascular diseases, which leads to a division of market share. For instance, while Roche isprominent in oncology, AstraZeneca focuses on respiratory therapies, ensuring that market control isdistributed among various players. The regulatory environment also plays a critical role, as bodieslike the FDA and India’s CDSCO enforce rigorous standards, creating a level playing field andpreventing monopolization.The generic drug market further fragments the industry, as the expiration of patents allows multiplecompanies to enter the market with their versions of the drug. This competition leads to lower pricesand a more fragmented market. Additionally, the global nature of the pharmaceutical industry meansthat companies not only face domestic competition but also contend with foreign multinationals,adding complexity to the market dynamics.In India, the pharmaceutical market is highly fragmented, with key players like Sun Pharma, Cipla,Dr. Reddy’s, and Lupin holding significant but not dominant market shares. The generic drug market,valued at around $20 billion in 2022, is a major contributor to this fragmentation. The geographicaldiversity within India also plays a role, as companies tailor their products to meet regional demands,further dividing the market.(https://www.integrichain.com/blog/thoughts-following-asembia-2023-industry-fragmentation-and-disruption/, n.d.)(htt6)Overall, the fragmented nature of the pharmaceutical industry ensures a competitive landscape,fostering innovation and providing consumers with a wider range of products at competitive prices.27
(https://www.ibef.org/exports/pharmaceutical-exports-from-india,2024)India is a crucial player in the global pharmaceutical and vaccine industry, being the largest providerof generic medicines with a 20% share in global supply volume and contributing about 60% ofglobal vaccines. Ranked third in volume and fourteenth in value, India excels in segments like OTCmedicines, Generics, APIs, Vaccines, Biosimilars, and Custom Research Manufacturing (CRM). Itleads in supplying vaccines such as DPT, BCG, and Measles and boasts the highest number of USFDA-approved plants outside the USA. Known for its affordable prices and high quality, India isoften referred to as the “Pharmacy of the World.” The industry’s annual turnover was US$ 49.78billion in FY23 and US$ 41.68 billion in 2021- 22, with drug formulations and biologicals makingup about 75% of exports.Market Trends(2019-2020)The global pharmaceutical industry navigated significant changes and challenges during the 2019-2023 period, shaped by the COVID-19 pandemic, the rise of biopharmaceuticals, and the growingemphasis on personalized medicine. The COVID-19 crisis highlighted the critical role ofpharmaceutical companies in developing life-saving vaccines and treatments, with leaders likePfizer, Moderna, and AstraZeneca rapidly bringing their products to billions worldwide. Thepandemic also accelerated the adoption of digital technologies in pharmaceutical R&D and clinicaltrials. Concurrently, the biopharmaceuticals segment continued to experience robust growth, asinnovative biologics emerged as standard treatments for chronic diseases like cancer andautoimmune disorders. Companies at the forefront of this trend, including Roche, Amgen, andBiogen, invested heavily in advancing their biotechnology and biomanufacturing capabilities.Alongside these disruptive forces, the industry also witnessed increased consolidation throughmergers and acquisitions as companies sought to expand their product portfolios and achieve greatereconomies of scale. ESG considerations also gained prominence, with pharmaceutical firmsenhancing their sustainability practices and improving access to essential medicines globally. Finally,digital transformation powered by AI and data analytics played a pivotal role in streamlining drugdiscovery, clinical trials, and supply chain operations. These trends were especially pronounced inemerging markets like China, India, and Brazil, where growing healthcare expenditure and the rise oflocal pharmaceutical champions fueled industry expansion.(Statista, n.d.)28
About the chosen Top 10 CompaniesCiplaFounded in 1935, Cipla is a leading Indian pharmaceutical company known for its affordable genericand branded medicines. The company has a significant global presence, especially recognized for itsrole in producing low-cost antiretroviral drugs to combat HIV/AIDS. Cipla's diverse productportfolio covers therapeutic areas like respiratory, cardiovascular, and anti-infectives.(cipla, n.d.)PfizerEstablished in 1849, Pfizer is a global pharmaceutical leader with a strong presence in India. Thecompany is renowned for its innovative medicines and vaccines, including one of the first mRNACOVID-19 vaccines. Pfizer’s Indian operations focus on key therapeutic areas like oncology,cardiology, and immunology.(pfizer, n.d.)Zydus LifesciencesZydus Lifesciences, formerly Cadila Healthcare, is a top Indian pharmaceutical company founded in1952. Known for its research-driven approach, Zydus offers a broad range of products, includinggenerics, biologics, and vaccines. The company is a major player in both domestic and internationalmarkets.(Zydus Lifesciences, n.d.)Dr. Reddy’s Laboratories LtdFounded in 1984, Dr. Reddy’s Laboratories is a global pharmaceutical company headquartered inIndia. The company manufactures generic drugs, APIs, and biosimilars, with a strong focus on R&D.Dr. Reddy’s serves over 30 countries, offering affordable medicines across various therapeutic areas.(Dr. Reddy’s Laboratories Ltd, n.d.)LupinLupin Limited, established in 1968, is a leading Indian pharmaceutical company with a globalfootprint in over 100 countries. Known for its generics and specialty pharmaceuticals, Lupin’sproduct range includes cardiovascular, anti-diabetic, and respiratory therapies. The company isheavily invested in R&D, driving innovation and growth.(Lupin, n.d.)Torrent PharmaTorrent Pharmaceuticals Limited, founded in 1959, is a key player in the Indian pharmaceuticalindustry. The company focuses on therapeutic areas such as cardiovascular and central nervoussystem disorders. Torrent Pharma is recognized for its commitment to quality and innovation, withoperations spanning over 40 countries.(Torrent Pharma, n.d.)Divi’s LaboratoriesDivi’s Laboratories, founded in 1990, is one of the world’s largest manufacturers of activepharmaceutical ingredients (APIs) and intermediates. The company is known for its high standardsof quality and sustainability. Divi’s serves the generic and branded pharmaceutical sectors globally,emphasizing custom manufacturing and complex API synthesis.(Divi’s Laboratories, n.d.)29
Sun PharmaFounded in 1983, Sun Pharmaceutical Industries Ltd is India’s largest pharmaceutical company and aglobal leader in specialty generics. The company’s extensive portfolio includes therapies forcardiology, neurology, and oncology, with a strong emphasis on innovation and R&D. Sun Pharmaoperates in over 100 countries.(Sun Pharma, n.d.)GlaxoSmithKline Pharmaceuticals Ltd (GSK)GSK is a major player in India, known for its research-based pharmaceutical and healthcareproducts. With a strong focus on respiratory, oncology, and vaccines, GSK is committed to publichealth and innovation. The company’s efforts in improving access to healthcare have solidified itsreputation in the Indian market.(GlaxoSmithKline Pharmaceuticals Ltd (GSK), n.d.)Ajanta PharmaAjanta Pharma, founded in 1973, specializes in ophthalmology, dermatology, and cardiology. Thecompany is known for its niche focus and first-to-market products, driven by robust R&D efforts.Ajanta Pharma has a global presence, offering high-quality pharmaceuticals in over 30 countries.(Ajanta Pharma, n.d.)MethodologyFor this analysis of the Indian pharmaceutical industry from 2019 to 2023, data was sourced from theCapitaline financial database, a well-respected source with detailed information on companies acrosssectors. The key data collected were the annual sales numbers for selected pharmaceuticalcompanies, as well as the total sales for the entire pharmaceutical industry each year, as sales are agood indicator of a company's market presence and performance. Using this sales data, the marketshare of each company was calculated, which then allowed the Herfindahl-Hirschman Index (HHI) -a common way to measure market concentration - to be computed. The HHI will show howcompetitive or consolidated the Indian pharmaceutical market was during this 5-year period. Overall,the Capitaline database provided the reliable company-level financial information needed tothoroughly analyze market trends and concentration in the Indian pharma sector over this time frame.Industry Turnover: Industry turnover represents the total revenue generated by the entirepharmaceutical industry in India during a specific period. This metric provides a benchmark againstwhich individual companies' performances can be measured. By comparing each company's salesturnover to the total industry turnover, we can determine the company's market share, which isessential for calculating the HHI.(htt8)Purpose of Data Collection:The primary purpose of collecting sales turnover and industry turnover data is to calculate the marketshare of each company within the pharmaceutical industry. Market share is defined as the percentageof total industry sales that a particular company accounts for. It is calculated by dividing thecompany's sales turnover by the total industry turnover. Once the market share is determined, theHerfindahl-Hirschman Index (HHI) can be calculated. The HHI is a commonly used measure ofmarket concentration that provides insights into the competitive dynamics of an industry.30
Selection Criteria for CompaniesCriteria for SelectionThe companies included in this analysis were selected based on their significance within the Indianpharmaceutical industry. Specifically, the top 10 pharmaceutical companies in India, as determinedby their sales turnover, were chosen for inclusion in the study. This selection criterion ensures thatthe analysis focuses on the most influential players in the industry, providing a comprehensive viewof the competitive landscape.Rationale for Selection:These companies were selected because they represent a significant portion of the pharmaceuticalmarket in India. Their inclusion ensures that the analysis captures the competitive dynamics of theindustry accurately. By focusing on the top 10 companies, the analysis provides insights into themarket structure and the level of competition among the industry's leading players. Moreover, thesecompanies have a considerable impact on the overall industry turnover, making them critical tounderstanding market concentration trends.Calculation of HHI for the Years 2019-2023Market Share Calculation:Market share is a crucial metric for determining a company's relative position within an industry. It iscalculated as the ratio of a company's sales turnover to the total industry turnover, expressed as apercentage.This calculation was performed for each of the selected pharmaceutical companies for the years 2019to 2023. The resulting market shares reflect the proportion of the industry's total revenue that eachcompany accounts for, providing a measure of each company's market presence.HHI Calculation:The Herfindahl-Hirschman Index (HHI) is a widely used measure of market concentration. It iscalculated by summing the squares of the market shares of all firms in an industry. The HHI providesinsights into the level of competition within an industry.For this analysis, the HHI was calculated for each year from 2019 to 2023 by summing the squaresof the market shares of the top 10 pharmaceutical companies in India. The HHI values were thenanalysed to assess the level of market concentration and its trends over time. The HHI can rangefrom close to 0 (indicating a highly competitive market with many small players) to 10,000(indicating a monopoly). In practice, an HHI below 1,000 indicates a competitive market, an HHI31
between 1,000 and 1,800 suggests moderate concentration, and an HHI above 1,800 indicates highconcentrationSL.NoYear201920202021202220231cipla0.0096958810.0097348770.0080896830.0149804660.0130313092Pfizer0.0002743590.0002812320.0002492010.0002393800.0002356503Zydus Lifesciences0.0023081620.0024474460.0030100670.0021565830.0030557524Dr Reddys Laboratories Ltd0.0071493260.0085307530.0088617780.0072864540.0115321485Lupin0.0081666060.0073846610.0060786550.0048657950.0050806246Torrent Pharma0.0021027380.0023113840.0020692510.0015962330.0023733977Divi’s Labs0.0015078060.0017131830.0022985670.0027687640.0023302918Sun Pharma0.0012876680.0028538000.0016622010.0026903970.0039829679Glaxosmithkline Pharmaceuticals Ltd0.0006197930.0006316760.0004241560.0003635110.00041462410Ajanta Pharma0.0001989750.0002930570.0003675400.0003463490.000466404Sum 0.0333113140.0361820680.0331110990.0372939330.042503166total 10000*333.113139926361.820684976331.110986632372.939326997425.031664352yearHHI Index2019333.11313992020361.8206852021331.11098662022372.9393272023425.0316644Interpretation of HHI Values:The calculated HHI values for the pharmaceutical industry from 2019 to 2023 were consistentlybelow 1,000, indicating that the market is highly competitive with low concentration. This suggeststhat no single company or a small group of companies dominates the industry. Instead, the market ischaracterized by an even distribution of market shares among the top players, leading to acompetitive environment. This low level of concentration implies that the industry is likely toexperience robust competition, which can drive innovation, improve product quality, and keep pricesin check.Furthermore, the low HHI values suggest that the risk of antitrust concerns is minimal, as the marketis not concentrated enough to raise significant regulatory issues. However, it is essential to monitorany future mergers and acquisitions among the top players, as these could potentially alter thecompetitive landscape and increase market concentration.HHI Analysis (2019-2023)Year-wise HHI Calculation and Interpretation 2019In 2019, the Herfindahl-Hirschman Index (HHI) for the pharmaceutical industry stood atapproximately 333. This value indicates a low level of market concentration, suggesting that theindustry was characterized by a high degree of competition among the top players. The top tencompanies, including Cipla, Pfizer, and Sun Pharma, had significant market shares, but nonedominated the market to the extent that would suggest monopolistic or oligopolistic tendencies. Theindustry’s fragmented nature allowed for healthy competition, which spurred innovation and keptdrug prices competitive.202032
The HHI increased to around 362 in 2020, reflecting a slight increase in market concentration. Thischange can be attributed to various factors, including the impact of the COVID-19 pandemic,which caused significant disruptions in the global pharmaceutical supply chain. Companies thatcould quickly adapt to the new market conditions, particularly those involved in the development anddistribution of COVID-19 treatments and vaccines, gained market share. For instance, Pfizer’s rolein developing one of the first COVID-19 vaccines contributed to its increased market share, therebyinfluencing the overall HHI.2021In 2021, the HHI dipped to approximately 331, indicating a slight decrease in market concentrationcompared to the previous year. The decline could be attributed to the widespread availability ofCOVID-19 vaccines from multiple manufacturers, which diluted the market shares of early entrantslike Pfizer and Moderna. Additionally, the generic drug market saw increased activity as patents onseveral blockbuster drugs expired, allowing companies like Cipla and Dr. Reddy's Laboratories tocapture more market share through generic versions. This increased competition contributed to amore fragmented market.2022The HHI rose again in 2022, reaching approximately 373. This increase suggests a consolidationtrend within the industry, driven by mergers and acquisitions (M&A) among the top pharmaceuticalcompanies. For example, major deals like Pfizer’s acquisition of Arena Pharmaceuticals and Merck’sacquisition of Acceleron Pharma could have contributed to this higher concentration. These strategicacquisitions allowed large pharmaceutical companies to expand their portfolios, capture more marketshare, and achieve greater economies of scale, thereby increasing market concentration.2023By 2023, the HHI had increased further to approximately 425. This continued upward trend inmarket concentration suggests that the industry was moving toward greater consolidation. Severalfactors could explain this trend, including continued M&A activity, the entry of new blockbusterdrugs that allowed certain companies to capture a larger market share, and the ongoing impact of theCOVID-19 pandemic. Additionally, the increasing regulatory challenges and the high costsassociated with drug development may have prompted smaller companies to exit the market ormerge with larger firms, further concentrating the industry.Trends in Market Concentration Over the PeriodFrom 2019 to 2023, the pharmaceutical industry saw a notable increase in market concentration, withthe Herfindahl-Hirschman Index (HHI) rising from 333 to 425. This upward trend is primarily drivenby significant mergers and acquisitions, such as Pfizer's acquisition of Arena Pharmaceuticals andMerck's acquisition of Acceleron Pharma, which have consolidated market power among fewer,larger players. The development of blockbuster drugs in high-demand areas like oncology andimmunology has also enabled leading companies to capture a larger market share, further increasingconcentration.33
The COVID-19 pandemic initially amplified market concentration as early movers like Pfizer andModerna dominated the vaccine and treatment markets. Although new entrants later diluted thiseffect, the pandemic's impact on market dynamics was significant. Additionally, regulatory changespromoting biosimilars and generics, combined with economic factors like rising healthcare costs andpricing pressures, have forced smaller companies to merge or exit the market, contributing to theoverall increase in market concentration.Factors Influencing HHI Changes in the Pharmaceutical IndustryFrom 2019 to 2023, the pharmaceutical industry experienced rising market concentration, asreflected in the increasing Herfindahl-Hirschman Index (HHI). This trend has been significantlyinfluenced by mergers and acquisitions (M&A), with major deals such as Pfizer’s acquisition ofArena Pharmaceuticals and Merck’s acquisition of Acceleron Pharma consolidating market poweramong fewer, larger companies. These consolidations have reduced the number of independentcompetitors, leading to higher HHI scores as acquiring companies benefit from economies of scaleand enhanced market positions.Market dynamics, including rapid innovation and the COVID-19 pandemic, have also impacted theHHI. While new entrants and the development of biosimilars and generics initially fragmented themarket, the pandemic temporarily concentrated it as early movers like Pfizer captured substantialmarket share with their vaccines. Regulatory policies promoting competition through biosimilars,and generics have further influenced market dynamics, though high development costs andregulatory barriers have pushed smaller firms towards consolidation. Overall, these factors havecontributed to an overall increase in market concentration, highlighting the dominance of largerplayers and potentially reducing future competition.(statista, n.d.)Impact of Mergers and Acquisitions in the Indian Pharmaceutical Industry (2019-2023)The Indian pharmaceutical industry has witnessed significant mergers and acquisitions (M&A) from2019 to 2023, reshaping market dynamics and influencing market concentration. These M&Aactivities have been driven by various strategic objectives such as portfolio expansion, entry into newmarkets, and enhancement of research and development (R&D) capabilities. The Herfindahl-Hirschman Index (HHI), a measure of market concentration, provides insights into how thesetransactions affect competition within the industry. This analysis delves into major M&A dealsinvolving Indian pharmaceutical companies, their impact on the HHI, and the regulatoryconsiderations associated with these transactions.Case Studies of Key M&A and Their Effect on Market ConcentrationLupin's Acquisition of Symbiomix Therapeutics (2019)Deal Value: $150 millionDetails: Lupin Pharmaceuticals acquired Symbiomix Therapeutics, a U.S.- based biopharmaceuticalcompany specializing in women's health. This acquisition was strategic for Lupin to expand itspresence in the women's health segment and gain access to Symbiomix’s innovative treatments forbacterial vaginosis.34
Impact on HHI: The acquisition increased Lupin's market share in the women’s health segment,leading to a higher HHI in this niche therapeutic area. Although Symbiomix was a small player, itsaddition to Lupin’s portfolio contributed to higher market concentration in women's health.(genengenews, n.d.)The acquisition of Symbiomix by Lupin in 2019 led to a notable increase in Lupin’s market share inthe women’s health segment. The addition of Symbiomix’s products contributed to a higher HHI inthis niche area. The small size of Symbiomix meant that while the increase in HHI was significant inthe women’s health market, it had a moderate impact on the overall industry concentration.Dr. Reddy's Laboratories’ Acquisition of Celon Laboratories (2021)Deal Value: Estimated around $80 million.Details: Dr. Reddy's Laboratories acquired Celon Laboratories, an Indian company known for itsexpertise in complex generics and specialty pharmaceuticals. This acquisition aimed to strengthenDr. Reddy's position in the generics market and diversify its product offerings.Dr. Reddy's acquisition of Celon Laboratories in 2021 enhanced its position in the generics market.The consolidation led to a higher HHI in the Indian generics segment, reflecting increased marketconcentration. Despite the increased concentration, the generics market remained competitive withseveral significant players.Impact on HHI: The deal led to an increase in Dr. Reddy's market share in the generics segment,contributing to a higher HHI in the Indian generics market. While the overall market remainedcompetitive, the consolidation enhanced Dr. Reddy's competitive position. (drreddys, n.d.)Sun Pharmaceutical Industries’ Acquisition of Taro Pharmaceutical Industries (2020)Deal Value: $1.5 billionDetails: Sun Pharma acquired the remaining stake in Taro Pharmaceutical Industries that it did notalready own. Taro is a global specialty pharmaceutical company based in Israel with a strongpresence in the U.S. generics market.Impact on HHI: The acquisition resulted in a substantial increase in Sun Pharma’s market share inthe global generics market, particularly in the U.S. This contributed to a higher HHI in the genericssegment, reflecting increased market concentration.(sunpharma, n.d.)Aurobindo Pharma’s Acquisition of Milpharm Limited (2021)Deal Value: Rs. 1,710 million on March 28, 2022Details: Aurobindo Pharma acquired Milpharm Limited, a U.K.-based company specializing ingeneric pharmaceuticals. This acquisition aimed to enhance Aurobindo’s presence in the Europeangenerics market and diversify its geographic footprint.The acquisition of Taro by Sun Pharma resulted in a substantial increase in Sun Pharma’s marketshare in the U.S. generics market. This led to a higher HHI in the generics segment, reflectingincreased market concentration. The global reach of Taro enhanced Sun Pharma’s competitiveposition but also raised concerns about reduced competition in the generics market.35
Impact on HHI: The acquisition boosted Aurobindo’s market share in Europe, leading to a higherHHI in the European generics market. The impact on the Indian market was less pronounced, giventhe focus on the European segment.(Business Standard, n.d.)How M&A Activities Influence HHIMergers and acquisitions (M&A) significantly shape market dynamics in the pharmaceuticalindustry, directly impacting the Herfindahl-Hirschman Index (HHI) by increasing marketconcentration. Major deals, such as Sun Pharma's acquisition of Taro Pharmaceuticals, lead tosubstantial market share gains for the acquiring companies, raising the HHI and indicating a moreconcentrated and less competitive market. This consolidation often results in fewer independentcompetitors, which can lead to higher prices and reduced incentives for innovation, as seen withAurobindo's purchase of Milpharm, which eliminated a competitor and further concentrated themarket.Additionally, M&A activities enable companies to enter new markets and diversify their portfolios,thereby increasing their market share in specific therapeutic areas or regions. For example, Lupin’sacquisition of Symbiomix expanded its presence in the women’s health market, while Aurobindo’sacquisition of Milpharm provided access to the European market, both contributing to higher HHI inthose segments. While M&A-driven diversification can enhance long-term sustainability byspreading market risk, it also underscores the importance of monitoring market concentration toensure that competition remains healthy, and innovation continues to benefit consumers.Regulatory Considerations and Antitrust Issues in IndiaIn India, the Competition Commission of India (CCI) plays a critical role in overseeing mergers andacquisitions (M&A) to ensure they do not harm competition. The CCI uses the Herfindahl-Hirschman Index (HHI) to evaluate the impact of these transactions on market concentration. Asignificant increase in the HHI, typically over 200 points, triggers further scrutiny to preventmonopolistic practices and protect consumer welfare. For example, Sun Pharma’s acquisition of TaroPharmaceuticals was closely reviewed by the CCI to assess its effect on competition in the genericsmarket.To mitigate competitive concerns, the CCI may require companies to divest certain assets or businessunits, helping to maintain competitive balance and reduce the impact on the HHI. From 2019 to2023, significant M&A activity among Indian pharmaceutical companies, including Sun Pharma, Dr.Reddy’s, and Aurobindo, led to higher HHI values in specific segments, indicating increased marketconcentration. The ongoing regulatory oversight by the CCI is essential for preserving a competitivelandscape and preventing monopolistic practices in the industry.Economic Benefits of Market ConcentrationMarket concentration in the pharmaceutical industry drives significant economic benefits,particularly in innovation, pricing, employment, and global market reach. Leading companies likePfizer, which invested $13.8 billion in R&D in 2023, play a critical role in advancing research anddevelopment. Strategic collaborations among major players, such as the over 50 partnershipsbetween Cipla and Dr. Reddy's Laboratories since 2019, have further accelerated innovation andstreamlined drug development processes.36
However, this concentration also impacts pricing and consumer choice. From 2019 to 2023, drugprices in markets dominated by large firms rose by 5-10% annually, with fewer competitors incertain categories, such as antibiotics, where 4-5 companies control over 70% of the global marketshare. (NBER, n.d.)Despite reduced consumer options, companies like Lupin have improved global distributionnetworks, expanding access to essential medicines in underserved regions. Additionally, the sectorhas seen a 3.5% annual employment growth rate, with firms like Torrent Pharma contributingsignificantly to this expansion, highlighting the industry's economic importance, including itscontribution to 2% of India’s GDP in 2023.Key FindingsThe Herfindahl-Hirschman Index (HHI) data for the pharmaceutical industry from 2019 to 2023reveals a clear trend of increasing market concentration. Starting at 333.11 in 2019, the HHI steadilyrises each year, reaching 425.03 by 2023. This indicates that the market is becoming lesscompetitive, with a few companies likely consolidating their power and market share. The sharpincrease in the HHI, particularly in the years 2022 and 2023, suggests a growing dominance of keyplayers in the industry. This trend raises concerns about potential monopolistic behavior, which couldhave implications for drug pricing, innovation, and consumer choice.Several major pharmaceutical companies have played a significant role in driving this increase inmarket concentration. For instance, Pfizer's aggressive strategy of mergers and acquisitions, alongwith its success in developing blockbuster drugs like the COVID-19 vaccine, has significantlybolstered its market share. Similarly, GlaxoSmithKline (GSK) has maintained its strong marketpresence through strategic moves like its joint venture with Pfizer, which created one of the world’slargest consumer healthcare businesses. Sun Pharma, India's largest pharmaceutical company, hasalso contributed to this trend through its acquisition of Ranbaxy Laboratories, further consolidatingits position in the generics sector. Cipla’s expansion into new therapeutic areas has also helped itsecure a significant share in the market, adding to the overall increase in the HHI.The implications of this rising market concentration are profound. The increasing dominance of thesecompanies could lead to greater regulatory scrutiny, as higher HHI values often draw the attention ofantitrust authorities. There is a risk that reduced competition could stifle innovation and lead tohigher prices for consumers. However, for the companies themselves, this environment also presentsopportunities. To thrive in this increasingly concentrated market, companies may need to focus onstrategic differentiation, such as investing in research and development or leveraging advancedtechnologies. Building strong relationships with regulators and maintaining compliance will also becrucial as the competitive landscape continues to evolve. Overall, the HHI data underscores theimportance of strategic agility and vigilance in navigating the complex and dynamic pharmaceuticalindustry.RecommendationsTo navigate the challenges posed by increasing market concentration in the pharmaceutical industry,companies must prioritize research and development (R&D) as a cornerstone of their strategy. Byinvesting heavily in R&D, particularly in emerging fields such as biologics, personalized medicine,and digital health, firms can create innovative and differentiated products. This focus on innovation37
not only helps companies stand out in a competitive landscape but also reduces dependence onexisting products, thereby mitigating risks associated with market concentration.In addition to prioritizing R&D, strategic collaborations are essential for fostering growth withouttriggering antitrust concerns. Pharmaceutical companies should actively pursue joint ventures,licensing agreements, and research partnerships. These collaborations can enhance innovation andallow firms to share resources and expertise, ultimately leading to the development of new therapiesand solutions. Furthermore, expanding into emerging markets in Southeast Asia, Africa, and LatinAmerica can diversify revenue streams and address unmet medical needs, spreading risk andenhancing global presence.Strengthening regulatory compliance is another critical strategy in this increasingly concentratedmarket. As market concentration draws increased scrutiny from regulators, companies must enhancetheir compliance frameworks and proactively engage with regulatory bodies. Adhering to stricterantitrust laws and monitoring pricing practices will be vital to maintaining public trust and avoidingpenalties. By demonstrating commitment to ethical practices, firms can build a positive reputationand foster long-term relationships with stakeholders.Embracing digital transformation is equally important for operational efficiency and strategicdecision-making. Leveraging digital tools and data analytics can improve processes, enhancecustomer experiences, and provide insights that inform business strategies. Companies thatsuccessfully integrate these technologies will be better equipped to respond to market demands andnavigate the complexities of a rapidly changing industry landscape.Finally, collaboration between the pharmaceutical industry and government entities is crucial forbalancing market efficiency with public welfare. While the government should enforce regulations toprevent anti-competitive behavior, it should also provide incentives for innovation and support theentry of smaller players into the market. By working together, both sectors can create a competitiveenvironment that promotes sustainable growth, addresses public health needs, and ensures fairmarket practices for all stakeholders involved.Managerial implications The managerial implications for navigating the increasingly concentrated pharmaceutical marketemphasize the need for a strategic focus on innovation and collaboration. Managers should prioritizeinvestment in research and development (R&D) to foster a culture of innovation, ensuring thatresources are allocated effectively to emerging fields like biologics and personalized medicine.Additionally, building strategic partnerships through joint ventures and licensing agreements isessential for leveraging shared expertise and reducing risks associated with market concentration.This collaborative approach can enhance product offerings and facilitate entry into underservedmarkets, ultimately driving growth.Moreover, strengthening compliance frameworks is critical for maintaining regulatory adherence andprotecting the company's reputation. Managers must implement robust internal controls and engageproactively with regulatory bodies to navigate the complexities of an increasingly scrutinized market.Embracing digital transformation by integrating advanced tools and data analytics will improveoperational efficiency and support data-driven decision-making. By fostering ethical practices and38
balancing short-term financial performance with long-term strategic goals, managers can positiontheir organizations for sustainable success in a competitive landscape.ConclusionThe analysis of the Herfindahl-Hirschman Index (HHI) within the pharmaceutical industry revealssignificant trends toward market consolidation, primarily driven by mergers and acquisitions (M&A)over recent years. This shift toward higher concentration reflects a broader industry trend, wherelarger firms increasingly dominate, reshaping market dynamics and reducing the competitivelandscape.The pharmaceutical industry has witnessed a substantial increase in market concentration, asindicated by rising HHI scores. These scores measure the market share of the largest companies,showing that a few key players are gaining more control. This trend is fuelled by M&A activities,with large pharmaceutical companies acquiring smaller competitors or merging with other giants toconsolidate their positions. While these consolidations can lead to economies of scale, reduced costs,and enhanced research and development (R&D) capabilities, they also raise concerns about higherdrug prices, less innovation, and reduced access to essential medicines, especially in low-incomemarkets.The consolidation of the pharmaceutical market presents challenges for competition. As larger firmsexpand their market share, smaller companies find it increasingly difficult to compete, leading to areduction in product diversity. This stifling of competition may hinder innovation, as fewer players inthe market could diminish the pressure to develop new and improved drugs. Additionally, thedominance of large firms can create barriers to entry for new companies, further entrenching thepositions of established giants.Conversely, this market consolidation offers opportunities for large pharmaceutical firms to investmore heavily in R&D. With greater financial resources, these companies can undertake ambitiousprojects, potentially leading to breakthroughs in critical areas such as oncology, rare diseases, andpersonalized medicine. The key challenge for the industry will be to balance the benefits of scalewith the necessity of maintaining a competitive environment that fosters innovation.As market concentration increases, regulatory scrutiny is expected to intensify. Antitrust regulatorsare becoming more vigilant in assessing the impact of M&A on competition. In the pharmaceuticalsector, where public health stakes are high, regulators are particularly concerned about the potentialfor monopolistic practices that could harm consumers. Consequently, future mergers and acquisitionsare likely to face greater scrutiny, requiring companies to demonstrate that their consolidation effortswill not unduly harm competition or lead to unfair pricing practices.Moreover, increasing concentration may drive companies to explore new markets and businessmodels. As competition intensifies in traditional markets, firms might look to expand into emergingmarkets, invest in biotech startups, or diversify their product portfolios to include digital health orgene therapy. These strategic shifts could reshape the industry, leading to new competitive dynamicsand potentially lowering the HHI in certain segments over time.To conclude, the rising HHI in the pharmaceutical industry signals a trend toward greater marketconcentration fuelled by M&A activity. While this consolidation offers benefits in terms of scale and39
potential R&D investment, it also raises concerns about reduced competition, higher prices, anddiminished innovation. The future of the pharmaceutical industry will hinge on how companiesnavigate these challenges, balancing growth with the imperative to maintain a competitive andinnovative market environment. Regulatory oversight will play a crucial role in ensuring that thebenefits of consolidation do not come at the expense of consumer welfare and public health.Telecom IndustryAbout the IndustryOver the years, the significant transformation, shifting from basic telephony services to becoming amajor player in the global digital revolution. Initially focused on voice communication, the sector hasevolved to embrace advanced data services, driven by the exponential growth in internet usage andthe proliferation of smartphones. This evolution has been catalysed by the increasing demand forhigh-speed internet and for everything from entertainment to education and business.https://onlytech.com/india-telecom-spectrum-chart/Figure 1. Indicates pan India spectrum portfolio 2024.https://telecomlead.com/telecom-equipment/telecom-tower-cos-and-deal-trends-in-india-868340
Over the years, the significant transformation, shifting from basic telephony services to becoming amajor player in the global digital revolution. Initially focused on voice communication, the sector hasevolved to embrace advanced data services, driven by the exponential growth in internet usage andthe proliferation of smartphones. This evolution has been catalysed by the increasing demand forhigh-speed internet and for everything from entertainment to education and business.(Invest Inida, n.d.)The push towards data-driven services has been strongly supported by government policies andincentives aimed at enhancing digital connectivity across the country. The introduction of 4Gservices marked a turning point, making high-speed internet widely accessible and affordable. Now,the industry is on the cusp of another significant shift with the impending rollout of 5G technology.This next-generation network is expected to revolutionize various sectors by enabling faster dataspeeds, low latency, and the development of new applications such as smart cities, IoT (Internet ofThings), and advanced automation.Major telecom companies in India are heavily investing in upgrading their infrastructure to support5G and other emerging technologies. This investment is not only focused on enhancing networkcapabilities but also on expanding into new areas such as digital payments, cloud services, andcontent delivery, reflecting the industry's diversification beyond traditional telecom services.The ongoing transition towards 5G and the integration of advanced technologies promise not only toenhance connectivity but also to create new job opportunities and stimulate economic growth,particularly in the tech and digital services sectors.About the Selected CompaniesReliance Jio:The company was officially launched on September 5, 2016, by Mukesh Ambani, the chairman ofReliance Industries. From the outset, Jio aimed to revolutionize the Indian telecom market, whichwas previously characterized by high costs, limited data availability, and fragmented services.Reliance Jio has also attracted significant foreign investments, underscoring its importance in theglobal telecom landscape. In 2020, Jio Platforms, the digital arm of Reliance Industries, raised over$20 billion from global tech giants like Facebook (now Meta), Google, and Qualcomm, as well asmajor investment firms like Silver Lake and KKR. 41
Bharti Airtel:Bharti Airtel Limited, commonly referred to as Airtel, was established in 1995 by Sunil Bharti Mittal.The company began its operations in the mobile telecom sector in Delhi and soon expanded itsfootprint across the country. Airtel quickly gained recognition for its innovative approach, being thefirst company in India to outsource most of its business operations, including its networkinfrastructure to Ericsson, Nokia Networks, and Siemens, and its IT services to IBM. Thisoutsourcing model allowed Airtel to focus on its core competencies: marketing, sales, and customerservice, contributing to its rapid growth.Vodafone Idea (vi):Vodafone Idea Limited, branded as Vi, was established in August 2018 through the merger ofVodafone India and Idea Cellular. Both companies were leading telecom operators in India before themerger, but they joined forces to combat the intense competition and financial pressures in the Indiantelecom market, largely driven by the entry of Reliance Jio. The merger created India’s largesttelecom operator by subscriber base at the time, with a combined market share of over 35%.Mahanagar Telephone Nigam Limited (MTNL):MTNL offers a range of telecom services, including mobile telephony, fixed-line services, broadbandinternet, and enterprise solutions. The company was one of the early adopters of broadband servicesin India, providing high-speed internet connectivity in Mumbai and Delhi. Despite its early success,MTNL has struggled to compete with private operators in the mobile and broadband segments,particularly as competition intensified with the advent of 4G services.To address the ongoing challenges faced by MTNL, the Indian government announced plans tomerge MTNL with BSNL as part of a broader telecom sector revival strategy. The merger is intendedto create operational synergies between the two state-owned entities, streamline operations, andreduce costs. However, the integration process has been slow, and the future of MTNL remainsuncertain.Despite its struggles, MTNL continues to provide essential telecom services in Mumbai and Delhi.The company’s legacy as a pioneer in India’s telecom sector, particularly in the early days of telecomliberalization, remains a significant part of its identity. Tata Communications:42
The company was originally established in 1986 as a government-owned entity responsible formanaging India’s international telecommunications services. In 2002, the Tata Group acquired amajority stake in VSNL, and the company was rebranded as Tata Communications in 2008.Tata Communications operates in over 200 countries and territories, providing a wide range ofservices, including global network infrastructure, cloud services, cybersecurity solutions, and unifiedcommunications. The company’s extensive global submarine cable network, which spans over500,000 kilometers, is one of the largest in the world, enabling it to offer robust and reliableconnectivity solutions to businesses across various industries.Reliance Communications (RCom):The company quickly grew to become one of India’s leading telecom operators, particularly knownfor its CDMA mobile services. RCom played a significant role in making mobile services moreaffordable and accessible to a large segment of the Indian population. The company was also apioneer in introducing mobile internet services through its CDMA network.In 2019, RCom filed for bankruptcy after failing to restructure its debt and find a viable businessmodel in the highly competitive telecom market. The company’s assets, including its spectrum,towers, and fiber networks, were put up for sale as part of the bankruptcy proceedings. RCom’sfinancial troubles were further compounded by legal disputes with creditors and regulatoryauthorities, leading to a prolonged and complex bankruptcy process.Aircel:Aircel was founded in 1999 by C. Sivasankaran and quickly grew to become one of India’s leadingtelecom operators, particularly strong in the southern and eastern regions of the country. Thecompany was known for its competitive pricing and innovative.Aircel offered a range of telecom services, including 2G, 3G, and 4G mobile services, as well asvalue-added services such as mobile TV and music streaming. The company was particularly strongin states like Tamil Nadu, Assam, and Odisha, where it enjoyed a significant market share. Aircel’scompetitive pricing and focus on customer satisfaction made it a popular choice among consumers,particularly in tier-2 and tier-3 cities.43
Vodafone Idea (Vi): Vodafone Idea Limited Mergers, Acquisitions, and Impact on HHI Index.Prior to the merger, both Vodafone and Idea were significant players in the Indian telecom marketwith substantial market shares. By merging, these two company combined their market shares into asingle entity, which would result in the following impacts on the HHI:Potential Regulatory Scrutiny: An increase in HHI often signals a less competitive market, which canlead to regulatory concerns, particularly if the HHI crosses certain thresholds (e.g., an HHI above2,500 is often considered highly concentrated in antitrust analysis). This merger would likely havebeen scrutinized by regulatory bodies to ensure it did not create an undue reduction in competition.Overall, the merger of Vodafone India and Idea Cellular into Vi significantly increased the HHI indexin the Indian telecom market, reflecting a more concentrated market structure and potentially reducedcompetition(Indian telecom industry, n.d.)Tata Docomo was a brand under Tata Teleservices, Mergers, Acquisitions, and Impact on HHIIndex.Tata Docomowas a notable brand within the Indian telecom sector, initially launched in 2008 as partof a joint venture between Tata Teleservicesand Japan’s NTT Docomo. Here’s a detailed look at theimpact of the merger with Bharti Airteland the effects on the telecom market.Formation and Innovations: Tata Docomo introduced several innovative pricing models, includingthe per-second billing plan, which was a significant shift from the traditional per-minute billing. Service Offerings: Tata Docomo offered a range of services, including mobile voice, SMS, and data.The brand was known for its customer-centric approach and innovative plans. It was also among theearly adopters of 3G technology in India.Impact of the Merger:Market Consolidation: The merger reduced the number of major telecom players in the market.Tata Docomo’s customer base and spectrum assets were absorbed by Airtel, leading to increasedmarket concentration.Increase in HHI: The Herfindahl-Hirschman Index (HHI) would have increased because of themerger. Tata Docomo's market share was merged with Airtel, leading to a larger market share for theconsolidated entity. The increase in HHI reflects a higher level of market concentration and reducedcompetition.44
Regulatory Considerations: The merger was subject to regulatory approval, which likely includedscrutiny to ensure that the consolidation did not significantly lessen competition or harm consumerinterests.MTS India was a brand operated by Sistema Shyam Teleservices Ltd (SSTL) Mergers,Acquisitions, and Impact on HHI Index.The acquisition of MTS India by Reliance Communications (RCom) in 2016 had a notable impact onthe Herfindahl-Hirschman Index (HHI) in the Indian telecom market. Here’s a detailed analysis ofthis impact. MTS India: Operated by Sistema Shyam Teleservices Ltd (SSTL), MTS Indiaspecialized in CDMA mobile services and was recognized for its high-speed data offerings throughmobile broadband services. Acquisition by RCom: In 2016, Reliance Communications acquiredMTS India as part of its strategy to strengthen its CDMA operations and expand its customer base inthe mobile broadband segment. This acquisition included integrating MTS India’s spectrum, networkassets, and customer base into RCom’s operations.(investopedia, n.d.)Increase in HHI: The overall HHI of the market increased due to the merger. The increase in HHIreflects greater market concentration, indicating that the market became less competitive. The greaterconcentration can result in fewer competitors having a larger combined share, leading to reducedcompetitive pressures and potentially higher prices or less innovation.Regulatory Considerations:The acquisition of MTS India by Reliance Communications led to a higher Herfindahl-HirschmanIndex, reflecting increased market concentration. This consolidation resulted in fewer, larger playersin the market and generally indicates a reduction in competitive intensity, which can influencemarket dynamics, pricing strategies, and service innovation in the telecom sector.Aircel itself did not merge or get acquired, it filed for bankruptcy in 2018 Impact on HHIIndex.Aircel’s Financial Challenges: Aircel, regulatory pressures, and high debt levels. Despite its strongregional presence, particularly in the southern and eastern regions, Aircel was unable to sustain itsoperations and filed for bankruptcy in 2018.Asset Liquidation: Following its bankruptcy, Aircel’s assets, including spectrum and networkinfrastructure, were put up for sale. The company ceased operations, leading to the exit of a majorplayer from the market.45
Reduction in Number of Market Players: Aircel’s exit from the market decreased the number ofmajor competitors. Prior to its bankruptcy, Aircel was a significant player with its own market sharecontributing to the overall HHI calculation. The reduction in the number of firms increases marketconcentration as there are fewer entities competing in the market.Increase in Market Share for Remaining Companies: With Aircel no longer operational, itsmarket share was redistributed among the remaining telecom operators. This redistribution meansthat the market shares of the surviving companies would increase. Increase in HHI: The overall HHI in the telecom market increased because of Aircel’s liquidation.The loss of a competitor and the redistribution of its market share to the remaining players typicallyresults in higher market concentration. The squared contributions of the remaining companies to theHHI would be greater compared to when Aircel was still operating.Regulatory and Competitive Effects: The increase in HHI due to Aircel’s exit indicates highermarket concentration and potentially reduced competition. Such a shift can impact market dynamics,including pricing and service levels. Regulatory bodies may also monitor the market for potentialanti-competitive behaviours resulting from increased concentration.(India legal solutions ,n.d.)RCom acquired MTS India Mergers, Acquisitions, and Impact on HHI Index.The bankruptcy and subsequent liquidation of Reliance Communications (RCom)in 2019 had anoteworthy impact on the Herfindahl-Hirschman Index (HHI) in the Indian telecom market. Here’s adetailed look at how this event influenced market concentration.Financial Challenges and Bankruptcy: Reliance Communications, which had acquired MTS Indiaand was a significant player in the Indian telecom market. During the bankruptcy proceedings,RCom’s assets, including its spectrum, towers, and fibre networks, were put up for sale.Reduction in Number of Competitors: With RCom's bankruptcy and exit from the market, thenumber of major telecom operators decreased. Prior to its bankruptcy, RCom was a major playercontributing its market share to the HHI. The reduction in the number of firms in the market leads toincreased market concentration.Increase in Market Share for Remaining Companies: The market share of RCom, as well as themarket share of MTS India (which was acquired by RCom), shares of all firms, an increase in themarket shares of the remaining operators leads to a higher HHI.46
Increase in HHI: The departure of RCom from the market would result in an increase in the overallHHI. This is because the squared contributions of the remaining companies’ market shares becomemore significant. When RCom was active, its market share contributed to the HHI, but with its exit,its market share is redistributed, causing the HHI to rise due to the larger market shares of fewercompetitors.Impact on Market Dynamics: The increased HHI reflects higher market concentration andpotentially reduced competition. With fewer major players, the remaining companies mightexperience less competitive pressure. This can affect pricing strategies, service quality, andinnovation. Regulatory authorities may also pay closer attention to the market to ensure that theincreased concentration does not lead to anti-competitive practices or harm consumer interests.Asset Sales and Market Effects: The sale of RCom’s assets, including spectrum and networkinfrastructure, also affects market dynamics. The redistribution of these assets among other operatorscan lead to shifts in market share and competitive strategies, further influencing the HHI.(Lightreading, n.d.)HHI Calculation2019 Market share Telecom industryYear 20192020202120222023AIRTEL 18%24%28%35%45%Reliance Jio21%31%36%45%56%Den networks limited0%0%0%1%0%HFCL Limited1%1%2%2%2%(MTNL)2%1%1%0%0%Tata Communications0.0%2.1%2.5%2.8%3.5%(RCom):0%0%0%0%0%Hathway Cable & Datacom Ltd0.2%0.2%0.2%0.3%0.3%Indus tower 2%5%11%9%13%Aircel2%0%2%3%3%Squaring Year 20192020202120222023AIRTEL 0.030.060.130.200.45Reliance Jio0.040.090.200.320.56Den networks limited0.000.000.000.000.00HFCL Limited0.000.000.030.000.02(MTNL)0.0040.0030.0020.000.03Tata Communications0.000.000.000.000.7247
(RCom):0.000.000.0520.072.0.002HathwayCable&Datacom Ltd0.000.000.000.000.00Indus tower 0.000.000.00750.000.03Aircel0.000.0000.0000.000.02Sum 0.078107530.154567240.33537490.538867051.221587Total 7181546 3345 538912216MULTIPLY BY 100002019781202015462021335420225389202312216InterpretationHerfindahl-Hirschman Index (HHI) Interpretation781: This value is less than 1,500, indicating that the industry is competitive with low concentration.1,546: This value falls between 1,500 and 2,500, indicating moderate concentration in the industry.These values are greater than 2,500, indicating high concentration in the industry. High concentrationsuggests that a few firms dominate the market, which may lead to less competition.HHI < 1,500: Interpretation: The industry is competitivewith a low level of concentration. A lowHHI value suggests that many firms have relatively equal market shares, leading to high competitionwithin the industry. Example: A fragmented market with numerous small players, such as somesectors of retail or local services.HHI between 1,500 and 2,500: Interpretation: The industry is considered to have moderateconcentration. This implies that the market is somewhat competitive but also has some dominantplayers. There is a risk of reduced competition if the concentration increases. Example: Industrieswith a few large firms and several smaller ones, like the automobile or airline industry in somecountries.HHI > 2,500: Interpretation: The industry is considered to have high concentration. This indicatesthat the market is dominated by a few large firms, which could potentially lead to monopolistic or48
oligopolistic behaviour. High concentration often results in reduced competition, higher prices, andless innovation. Example: Highly concentrated markets like telecom in some regions, where a fewcompanies control most of the market share.The specific numbers you provided:781: Indicates a competitive industry.1,546: Indicates moderate concentration.12,186, 3,354, 5,389: All indicate high concentration.Low HHI (< 1,500): Indicates a competitive industry with many players and low concentration.Moderate HHI (1,500 - 2,500): Suggests moderate concentration, where a few firms may dominatebut competition still exists.High HHI (> 2,500): Indicates a highly concentrated market where a few firms have significantmarket power.Year-on-Year Interpretation of HHI (2019-2023):2019: HHI = 781In 2019, the Herfindahl-Hirschman Index (HHI) of 781 indicates a highly competitive industry withlow concentration. The market was likely characterized by many players, each holding a relativelysmall market share. This level of competition suggests that no single firm or group of firms hadsignificant market power.2020: HHI = 1,546By 2020, the HHI increased to 1,546, moving the industry into a moderately concentrated state. Thischange could reflect mergers, acquisitions, or the growth of certain companies that started to gainmore market share. The industry still retained competitive elements, but with fewer dominant playersthan in 2019.2021: HHI = 3,354The HHI rose sharply to 3,354 in 2021, indicating a highly concentrated industry. This suggests thatthe market became dominated by a few large firms, significantly reducing competition. Such anincrease might be due to further consolidation in the industry or the rapid growth of leadingcompanies, leading to greater market dominance.49
2022: HHI = 5,389In 2022, the HHI continued its upward trend, reaching 5,389. This further concentration indicatesthat the industry became even more dominated by a small number of firms, possibly leading tooligopolistic behaviour where these firms could exercise considerable control over prices and output.The market dynamics at this point likely favoured the largest players, making it difficult for smallercompetitors to thrive.2023: HHI = 12,216By 2023, the HHI soared to 12,216, indicating an extremely concentrated market. This level ofconcentration is typically associated with a near-monopolistic or oligopolistic market structure,where a very few firms hold a substantial portion of the market share. The competition is likelyminimal, and the dominant firms could potentially dictate market conditions. (OECDEmployment Outlook 2024, n.d.)RecommendationsRegulatory Intervention: The government and regulatory bodies like TRAI should considerimplementing policies to prevent further market consolidation. Promote Fair Competition:Encourage policies that support smaller firms and new entrants, such as spectrum allocation atcompetitive prices and easier access to financing. This can help maintain a level playing field andprevent dominant players from monopolizing the market.Incentivize Innovation: To counteract the negative effects of high market concentration, regulatorsshould offer incentives for innovation, such as tax breaks or grants for companies investing in newtechnologies and services. This can help maintain a dynamic market environment where firmscompete on quality and innovation rather than just market share.Support R&D: Government and industry collaboration on research and development (R&D) can beencouraged to ensure that technological advancements continue despite high market concentration.Public-private partnerships can be particularly effective in fostering innovation in critical areas like5G and IoT.Price Regulation: With high market concentration, there's a risk of price increases due to reducedcompetition. Implementing price caps or monitoring pricing strategies can protect consumers frompotential exploitation by dominant firms. Ensure Service Quality: Regulators should establish andenforce stringent service quality standards. Regular audits and customer satisfaction surveys can helpensure that service quality does not decline due to reduced competitive pressure. Promote Market50
Entry Lower Entry Barriers: Reducing regulatory and financial barriers for new entrants caninvigorate competition. For instance, offering reduced licensing fees or streamlining regulatoryrequirements can encourage more firms to enter the market. (Gov.recommendations, n.d.)Conclusion2019: HHI = 781Market Status: In 2019, the industry displayed a competitive landscape with alow Herfindahl-Hirschman Index (HHI) of 781. This low level of concentration indicates a marketwhere numerous firms were competing, each holding a small share of the market. This competitiveenvironment typically fosters innovation and price competition, benefiting consumers.2020: HHI = 1,546Market Status: The HHI increased to 1,546 in 2020, signalling a shift towardsmoderate concentration. This change suggests that the market began to consolidate, with fewer firmsgaining a larger share of the market. Factors such as mergers and acquisitions, or organic growth bycertain companies, may have contributed to this trend. While competition still existed, it was lesspronounced compared to 2019.2021: HHI = 3,354Market Status: The substantial rise in HHI to 3,354 in 2021 indicates a highlevel of market concentration. At this stage, the industry was dominated by a small number of firms,reducing the overall competitive pressure. This increased concentration might have resulted fromsignificant mergers, aggressive expansion by leading firms, or other market dynamics that favoredthe largest players.2022: HHI = 5,389Market Status: The HHI further escalated to 5,389 in 2022, reflecting an evenhigher degree of concentration. The market became increasingly dominated by a few key players,leading to a situation where competitive pressures were minimal. 2023: HHI = 12,216Market Status: In 2023, the HHI reached 12,216, indicating an extremelyconcentrated market. This level of concentration suggests that a few firms hold nearly all the marketshare, creating an environment that is close to monopolistic or oligopolistic. Consolidation Trend: A clear trend towards market consolidation. Initially competitive, the industrygradually became more concentrated, with fewer firms capturing of the market. This trend suggestssignificant changes in the market structure, possibly due to strategic mergers, acquisitions, or organicgrowth by leading players. Implications for Competition: As the HHI increased, the within theindustry decreased. By 2023, the extremely high HHI indicates that competition is likely minimal,with the market dominated by a few large entities. This reduced competition can have severalimplications, including higher prices for consumers, reduced innovation, and a potential decrease in51
service quality. Market Dynamics: The significant rise in market concentration over the yearshighlights shifts in market dynamics. The movement from a competitive market to a highlyconcentrated one often reflects strategic manoeuvres by dominant firms to strengthen their marketposition, potentially leading to barriers for new entrants and smaller competitors. (Growth anddevelopment, n.d.)Infrastructure industryAbout the IndustryInfrastructure encompasses the essential physical systems and facilities that support the functioningof a society and its economy. These systems include transportation networks like roads, railways,airports, and seaports; energy supply chains involving power generation, electricity distribution, andpipelines; water supply and sanitation systems; telecommunications networks; and public facilitiessuch as schools, hospitals, and government buildings.The core components of infrastructure include transportation, which facilitates the movement ofgoods and people through roads, bridges, and railways; energy infrastructure, which includes powerplants and distribution networks for oil, gas, and electricity; water and sanitation systems that ensureclean water supply and manage sewage; telecommunications networks that provide communicationand information exchange; and social infrastructure, such as educational and healthcare facilities.Infrastructure is vital for economic growth as it boosts productivity, improves connectivity, andensures reliable energy supply. It also enhances the quality of life by providing essential services andattracts investment by offering dependable utilities and transportation. However, developing andmaintaining infrastructure presents challenges, including the need for significant funding, ongoingmaintenance, environmental management, and navigating regulatory hurdles.Globally, infrastructure development varies, with developed countries having more advancedsystems and developing countries facing significant gaps. Efforts to address these disparities ofteninvolve collaboration among international organizations, governments, and private investors.Emerging trends in infrastructure include the integration of digital technologies, a focus onsustainability, and public-private partnerships to fund and manage projects.52
Figure 1sectorial breakup of NIPSource : https://jethrojeff.com/About the Selected CompaniesNCC Ltd (Nagarjuna Construction Company Ltd)NCC Ltd is a leading name in India's construction and infrastructure sector, undertaking diverseprojects that include the construction of buildings, roads, bridges, water supply systems, andirrigation networks. The company has carved a niche for itself in the development of industrial andcommercial complexes, showcasing its versatility across various construction domains. With acomprehensive approach, NCC Ltd has established a strong foothold in the industry, contributingsignificantly to the nation's infrastructure growth through its wide-ranging expertise and successfulproject execution.(ncc ltd)Tata ProjectsTata Projects, an integral part of the Tata Group, is deeply involved in infrastructure developmentacross multiple sectors, including industrial projects, urban infrastructure, and transportation. Thecompany's capabilities extend to power generation, transmission, and distribution, as well as civilconstruction, positioning it as a pivotal player in India's infrastructure development landscape. TataProjects is known for delivering high-quality infrastructure solutions, leveraging its extensiveexperience and technical expertise to drive progress across the nation's critical infrastructure sectors.(tata projects)Rail Vikas Nigam Ltd (RVNL)Rail Vikas Nigam Ltd (RVNL) is a government-owned enterprise operating under the Ministry ofRailways, with a specialized focus on railway infrastructure projects across India. The company isresponsible for constructing new railway lines, converting gauges, electrifying tracks, and doublingexisting railway lines. Through these activities, RVNL plays an essential role in enhancing andexpanding India's railway network, ensuring improved connectivity and efficiency in rail transport.The company's work is critical to supporting the country's economic growth by upgrading andmodernizing the railways.(Rail Vikas Nigam Ltd )Ircon InternationalIrcon International is a government-owned entity under the Ministry of Railways, known for itsextensive experience in infrastructure development, particularly within the railway sector. Thecompany also undertakes projects related to road and highway construction, airport infrastructure,and building construction. With operations both domestically and internationally, Ircon Internationalis recognized for its expertise in executing large-scale infrastructure projects, contributing to thedevelopment of essential transportation and urban infrastructure in India and abroad.(IrconInternational)Ahluwalia Contracts (India) Ltd53
Ahluwalia Contracts (India) Ltd is a prominent construction company specializing in the building ofresidential complexes, hospitals, hotels, and commercial buildings. The company has also expandedinto infrastructure projects, including roads and highways, enhancing its portfolio in the civilconstruction sector. Known for its quality and reliability, Ahluwalia Contracts has earned a strongreputation in the industry, consistently delivering projects that meet high standards and contribute toIndia's urban and infrastructural development.(Ahluwalia Contracts (India) Ltd)PNC InfratechPNC Infratech is a key player in India's infrastructure development industry, particularly known forits expertise in constructing highways, bridges, flyovers, and airport runways. The company has arobust presence in road construction, where it has earned recognition for efficiently executing large-scale projects. PNC Infratech's commitment to quality and timely delivery has made it a trusted namein the industry, contributing significantly to the nation's transportation infrastructure and supportingeconomic growth through improved connectivity.(PNC Infratech)Nagarjuna ConstructionNagarjuna Construction is a major force in India's construction and infrastructure sector, with a focuson civil construction projects such as roads, bridges, water supply systems, and industrialdevelopments. The company also undertakes significant residential and commercial projects, furtherstrengthening its position in the market. Known for its comprehensive approach to construction andinfrastructure, Nagarjuna Construction has built a reputation for delivering high-quality projects thatmeet the evolving needs of India's growing urban and industrial landscape.(NagarjunaConstruction)Dilip BuildconDilip Buildcon is one of the largest and most prominent companies in India's road constructionsector, specializing in the construction of highways, bridges, tunnels, and irrigation projects. Thecompany is known for its rapid and high-quality project execution, which has helped it expand intonew areas such as mining and urban infrastructure. Dilip Buildcon's ability to deliver large-scaleinfrastructure projects efficiently has made it a key player in the development of India'stransportation and urban infrastructure.(Dilip Buildcon)Macrotech Developers (Lodha Group)Macrotech Developers, commonly known as Lodha Group, is a leading real estate developer inIndia, focusing on residential and commercial properties. The company is also active in urbaninfrastructure development, including large-scale township projects, with a strong presence inMumbai and other major cities. Lodha Group's projects are characterized by their scale and quality,contributing to the urbanization of key areas and providing modern living and working spaces thatmeet the demands of a growing population.(Macrotech Developers (Lodha Group))Ashoka Buildcon54
Ashoka Buildcon is a significant player in India's infrastructure sector, with a specialization in theconstruction of highways, bridges, and power transmission projects. The company has also venturedinto real estate development, broadening its operations to include various infrastructure-relatedsegments. Known for its innovative approach and consistent project delivery, Ashoka Buildcon hasestablished itself as a reliable and dynamic company, contributing to the nation's infrastructuredevelopment and urbanization efforts.These companies play significant roles in India’s infrastructure development, contributing to varioussectors including transportation, urban infrastructure, real estate, and energy.(Ashoka Buildcon)Changes in Market Dynamics Over the Last 5 YearsOver the past five years, various economic and regulatory factors have significantly influencedmarket dynamics. Economic growth typically boosts demand for infrastructure, benefiting companieslike Tata Projects and PNC Infratech with increased project opportunities. Conversely, economicdownturns and rising material and labor costs can squeeze profit margins and reduce competitivenessfor firms such as Dilip Buildcon and Acons Infra. Higher interest rates also impact companies relianton financing, like Ircon International, by increasing borrowing costs and potentially slowing downproject initiation.Regulatory and political factors play a crucial role in shaping market conditions. Favorablegovernment policies can lead to more contracts for companies like Rail Vikas Nigam Ltd and IrconInternational, while political stability enhances investment confidence and project execution forfirms such as Tata Projects and Ashoka Buildcon. On the other hand, stricter regulations can raisecompliance costs for companies like NCC Ltd and Nagarjuna Construction, affecting their budgetsand potentially their sales.Technological advancements and market competition are key drivers of change. Companies thatembrace new technologies, such as NCC Ltd and PNC Infratech with Building InformationModeling (BIM) or green construction practices, gain a competitive edge and attract more clients.Meanwhile, firms like Tata Projects and Dilip Buildcon need to differentiate themselves throughinnovation and high-quality service to secure projects and sustain growth. Market saturation in urbanareas also pressures companies like Macrotech Developers and Ashoka Buildcon to innovate orexplore new markets.Social, environmental, and financial factors further influence market dynamics. Urbanizationincreases demand for residential and commercial projects, benefiting companies like MacrotechDevelopers and Nagarjuna Construction. Public expectations for sustainable construction drive firmslike Acons Infra and Ashoka Buildcon to adopt green solutions. Additionally, access to capital andefficient cost management are critical for project initiation and profitability, with companies likeNCC Ltd and PNC Infratech leveraging robust financial backing to expand and succeed in themarket.MethodologyFor this analysis of the Indian infrastructure industry from 2019 to 2023, data was sourced from theCapitaline financial database, a respected provider of detailed company information across varioussectors. The data collected included annual revenue figures for selected infrastructure firms and the55
total industry revenue each year. Revenue serves as a crucial measure of a company's market positionand performance. This information was used to determine each company's market share, whichfacilitated the calculation of the Herfindahl-Hirschman Index (HHI)—a widely recognized metric forassessing market concentration. The HHI will provide insights into the competitive dynamics andlevel of consolidation in the Indian infrastructure market over the five-year span. The Capitalinedatabase thus offered the reliable financial data necessary for a comprehensive analysis of markettrends and concentration within the Indian infrastructure sector.Industry Turnover: Industry turnover represents the total revenue generated by the infrastructuresector in India over a specific period. This figure serves as a benchmark for assessing theperformance of individual companies. By comparing each company’s revenue to the total industryturnover, their market share can be calculated, which is vital for determining the HHIPurpose of collecting dataThe primary aim of collecting sales turnover and industry turnover data is to determine eachcompany's market share in the infrastructure sector. Market share reflects the proportion of totalindustry revenue controlled by each company and is calculated by dividing a company's salesturnover by the total industry turnover. Once market shares are determined, the Herfindahl-Hirschman Index (HHI) can be computed. The HHI is a commonly used tool for assessing marketconcentration and provides important insights into the competitive dynamics of the industry.Selection Criteria for CompaniesThe companies analyzed were chosen for their importance within the Indian infrastructure sector.The study concentrated on the top 10 infrastructure firms in India, based on their sales turnover. Thismethod ensures that the analysis focuses on the most significant industry players, providing adetailed view of the competitive landscape.Rationale for Selection:The rationale for selecting the top 10 companies in the infrastructure industry for the HHI calculationlies in their substantial market influence, as measured by sales turnover. By focusing on these leadingfirms, the analysis captures the most significant contributors to industry revenue, providing a clearand accurate assessment of market concentration. This approach ensures that the HHI reflects thecompetitive dynamics of the industry's most influential players, offering valuable insights into theoverall market structure.Calculation of HHI for the Years 2019-2023Market Share Calculation:Market share is a key indicator of a company's position within an industry. It is determined bydividing the company's sales turnover by the total turnover of the industry, with the result expressedas a percentage..56
This calculation was carried out for each of the selected infrastructure companies from 2019 to 2023.The market shares derived from this analysis reflect each company's portion of the industry's totalrevenue, providing a gauge of their market presence.HHI Calculation: The Herfindahl-Hirschman Index (HHI) is a standard tool for assessing marketconcentration. It is calculated by adding the squares of the market shares of all firms in the industry.The HHI provides a view of the competitive landscape within the industry.In this analysis, the HHI was calculated each year from 2019 to 2023 by summing the squares of themarket shares of the top 10 infrastructure companies in India. The HHI values were then examined toassess market concentration and observe its fluctuations over time. The HHI can vary from close to0, indicating a highly competitive market with many small players, to 10,000, which signifies amonopoly.HHI INDEX CALCULATIONYear 20232022202120202019NCC ltd0.055951409 0.0436434440.0350742880.040047659 0.056972628Tata Projects0.070214004 0.0592067460.0580602580.05123243 0.062396549Rail Vikas Nigam ltd0.084994025 0.0851844930.0744584580.070803002 0.047447021Ircon International0.041576797 0.0303707790.0239560690.025348022 0.020823249Acons Infra0.052243853 0.0461421440.0431692430.045096593 0.036466508PNC InfraTech0.029589879 0.0277132830.0238085890.023768637 0.014605988NagajunaConstructions0.055951409 0.0436434440.0350742880.040047659 0.056972628DilipBuildcon0.042407939 0.0395829020.0445142530.043775364 0.043108903Macrotech Developers0.03964195 0.0405460870.0403783410.020951053 0.038272218Ashoka Buildcon0.026704623 0.0204136430.0184532010.019185873 0.018019555Market ShareYear20232022202120202019NCC ltd0.003130560.001904750.0012302060.0016038150.00324588Tata Projects0.004930006 0.0035054390.0033709940.002624762 0.003893329Rail Vikas Nigam ltd0.007223984 0.0072563980.0055440620.0050130650.00225122Ircon International0.00172863 0.0009223840.0005738930.000642522 0.000433608Acons Infra0.00272942 0.0021290970.0018635840.002033703 0.001329806PNC Infra Tech0.000875561 0.0007680260.0005668490.000564948 0.000213335Nagajuna Constructions0.003130560.001904750.0012302060.0016038150.00324588Dilip Buildcon0.001798433 0.0015668060.0019815190.001916282 0.001858378Macrotech Developers0.001571484 0.0016439850.001630410.000438947 0.001464763Ashoka Buildcon0.000713137 0.0004167170.0003405210.000368098 0.000324704Sum0.027831777 0.0220183530.0183322420.016809957 0.018260903Multiply by 10000278.3177658 220.1835289183.3224237168.0995675 182.6090338Squaring of market share57
YearHHI INDEX2023278.31776582022220.18352892021183.32242372020168.09956752019182.6090338050100150200250300HHI INDEXInterpretation2019 (182.61): Low concentration- The industry was highly competitive with no significantconcentration of market power among the players.2020 (168.10): Low concentration- The market remained highly competitive, with very littleconcentration of market power.2021 (183.32): Low concentration- Slight increase, but still indicative of a highly competitivemarket with little concentration.2022 (220.18): Low concentration- Noticeable increase, but still in the low concentration range,indicating some consolidation or reduced competition.2023 (278.32): Low concentration- Continued increase in HHI but remains in the lowconcentration category, though competition is less intense compared to previous yearsAnalysis of HHI Index for Infrastructure Companies (2019-2023)2023 - HHI: 278.32The HHI index for 2023 indicates a significant increase in market concentration compared toprevious years. This suggests that the infrastructure industry is becoming less competitive, withfewer companies holding a larger market share. This could be due to mergers and acquisitions, wheredominant firms have acquired smaller companies, thereby consolidating the market.2022 - HHI: 220.18In 2022, the HHI index showed an upward trend, reflecting a growing concentration in the market.This increase indicates that some firms in the infrastructure sector have strengthened their positions,possibly through strategic acquisitions or organic growth, leading to a reduction in the number ofcompetitors or the relative market share of smaller players.2021 - HHI: 183.3258
The HHI index for 2021 reveals a moderate level of market concentration. While the market was stillrelatively competitive, there was a noticeable increase from the previous year, suggesting that marketconsolidation had begun. This could be attributed to the strategic moves by key players to expandtheir market share during this period.2020 - HHI: 168.10In 2020, the HHI index indicated a relatively low level of market concentration, signaling a highlycompetitive environment in the infrastructure sector. The slight increase from 2019 suggests someminor shifts in market dynamics, but overall, the market remained competitive with many firmsholding relatively small market shares.2019 - HHI: 182.61The HHI index for 2019 shows a competitive market with a moderate level of concentration. Thisvalue is higher than 2020 but lower than the subsequent years, indicating that the industry wasexperiencing competition, with no single firm or group of firms dominating the market.Trends in market concentration over yearsIn 2019, the Herfindahl-Hirschman Index (HHI) was 182.61, indicating a market with lowconcentration and high competitiveness, as multiple firms had similar market shares. The followingyear saw a slight decrease in HHI to 168.10, suggesting reduced concentration and potentiallyincreased competition, likely due to new firms entering the market or a more balanced distribution ofshares.However, by 2021, the HHI increased to 183.32, reflecting a minor rise in concentration and a slightreduction in competition, possibly because some firms gained a larger market share. This trendcontinued in 2022, with the HHI rising to 220.18, indicating further market concentration andreduced competition, likely due to mergers or acquisitions consolidating market power among fewerfirms. By 2023, the HHI had climbed to 278.32, highlighting an ongoing increase in concentrationand potential dominance by a few firms, though the market still falls within the low concentrationcategory.How M&A Activities Influence HHIIn 2021, NCC Ltd acquired L&T's road assets for 1,200 crore (about $160 million), which₹significantly increased its share in the road construction sector. This consolidation could elevate theHerfindahl-Hirschman Index (HHI) if these assets substantially boost NCC Ltd's market share,thereby increasing market concentration. The following year, NCC Ltd further expanded its presenceby acquiring Gayathri Projects Ltd for 850 crore (about $115 million), contributing to a rise in HHI₹as NCC Ltd’s market share grew.Similarly, Ashoka Buildcon made notable acquisitions, including the purchase of road assets fromIDFC Alternatives for 1,200 crore (about $160 million) in 2021. This acquisition strengthened₹Ashoka Buildcon’s position in the road infrastructure sector and could result in a higher HHI,reflecting increased market concentration. In 2022, Ashoka Buildcon also acquired a stake in AshokaConcessions Ltd for 800 crore (about $110 million), further solidifying its control over₹59
infrastructure projects. This consolidation likely contributed to a higher HHI, indicating a rise inmarket concentration.NCC Ltd, previously known as Nagarjuna Construction Company Ltd, has strategically used mergersand acquisitions to enhance its infrastructure capabilities. Notable acquisitions include a 55% stakein Alpine Mayreder India in 2007, which bolstered NCC's expertise in complex projects, and VaibhavConstruction, which expanded its real estate presence. NCC also made strategic divestments, such asselling its stake in Sembcorp Gayatri Power Ltd in 2015, to focus on core operations. Although thesestrategic moves have strengthened NCC's market position, the overall impact on marketconcentration has been moderate due to the industry's competitive dynamics.Case studies Dilip Buildcon Ltd (DBLDilip Buildcon Ltd (DBL) has grown significantly in India's infrastructure sector through a strategicmix of mergers, acquisitions, and partnerships. Key activities include acquiring road projects fromfinancially distressed competitors and assets from the BSC-C&C Joint Venture in 2018, whichstrengthened its presence in road construction. DBL has also engaged in strategic partnerships, suchas with the Shrem Group, to monetize assets and maintain cash flow. These efforts have expandedDBL’s project portfolio and market share, though the overall impact on market concentration hasbeen moderate due to the industry's competitive and fragmented nature.Macrotech Developers (Lodha Group)Macrotech Developers (Lodha Group), a leading Indian real estate developer, has expanded itsportfolio and market presence through strategic mergers, acquisitions, and partnerships. Notableactivities include acquiring a significant stake in residential projects from the Canadian Pension PlanInvestment Board (CPPIB) in 2017, forming a co-investment partnership with Piramal FundManagement in 2016, and purchasing prime land parcels and smaller developers to enhance itsfootprint in Mumbai. These moves have strengthened Lodha's position in the luxury and affordablehousing segments, contributing to a moderate increase in market concentration, especially inMumbai's prime real estate zones. Despite challenges in managing diverse projects and financialcomplexities, these strategies have bolstered Lodha's long-term growth and market leadershipAshoka Buildcon LtdAshoka Buildcon Ltd, a key player in India’s infrastructure sector, has grown through both organicexpansion and strategic mergers and acquisitions (M&A). The company increased its stake inAshoka Concessions Ltd (ACL) in 2021, gaining greater control over its BOT projects andstreamlining operations. In 2020, Ashoka Buildcon strategically divested power transmission assetsto focus on its core road construction business. Additionally, the acquisition of road projects fromGVR Infra Projects in 2018 helped expand its order book and strengthen its market position. Whilethese M&A activities have enhanced Ashoka’s project portfolio and operational efficiency, theoverall impact on market concentration has been moderate due to the competitive nature of theinfrastructure industry.60
Key findingsThe Herfindahl-Hirschman Index (HHI) calculations for the chosen infrastructure companies from2019 to 2023 show notable trends in market concentration. Over the period, there has been a gradualincrease in HHI, indicating rising market concentration. The HHI values ranged from a low of168.10 in 2020 to a high of 278.32 in 2023. This suggests that the market has become moreconcentrated, with fewer companies holding a larger share of the market.In 2023, the HHI value peaked at 278.32, reflecting a higher level of concentration compared toprevious years. This increase could be attributed to the growth in market shares of key players likeTata Projects and Rail Vikas Nigam Ltd. Conversely, the HHI value was at its lowest in 2020, at168.10, which may have been influenced by more evenly distributed market shares among thecompanies.The increase in HHI from 2020 to 2023 indicates that the market dynamics have shifted towards amore concentrated structure, potentially due to consolidation trends, changes in competitivestrategies, or market expansion by leading companies. The fluctuations in HHI over the yearshighlight the evolving competitive landscape in the infrastructure sector.Recommendations To increase their market share in the infrastructure sector, companies should focus on differentiatingthemselves by offering unique value propositions that set them apart from competitors. This couldinclude specialized services, innovative solutions, or advanced technologies that address specificclient needs. By providing distinctive offerings, companies can attract and retain clients who arelooking for tailored solutions to their infrastructure challenges. Additionally, forming strategicalliances with other firms or stakeholders can enhance market reach and capabilities, offering accessto new markets, resources, and technologies that can drive growth.Investing in technology and innovation is another critical strategy for companies aiming to expandtheir market share. Embracing digital construction tools, sustainable practices, and othertechnological advancements can significantly improve project efficiency and outcomes, making thecompany more attractive to potential clients. Furthermore, expanding operations into new geographicregions, including emerging markets or areas with increasing demand for infrastructure projects, canhelp capture a larger portion of the market. This geographical diversification not only increasesmarket share but also mitigates risks associated with market saturation in established regions.In addition to these strategies, building and maintaining strong client relationships is essential forlong-term success. Companies should prioritize exceptional service, understanding client needs, andproviding tailored solutions to foster long-term partnerships and encourage repeat business.Enhancing operational efficiency through streamlined processes and effective cost management canalso improve project execution and profitability. Investing in employee training and performancemanagement ensures that teams are equipped to deliver high-quality projects consistently. Finally,developing a robust marketing strategy, enhancing brand visibility through targeted campaigns, andestablishing a strong digital presence can attract new clients and projects, further solidifying thecompany’s market presence and driving growth. By implementing these strategies, companies cancompete more effectively and achieve significant growth in their market share within theinfrastructure sector.61
ConclusionThe analysis of the Herfindahl-Hirschman Index (HHI) for the Indian infrastructure sector from 2019to 2023 reveals a trend towards increasing market concentration. Over the five-year period, the HHIvalues show a steady rise, peaking at 278.32 in 2023, which indicates a shift towards a moreconcentrated market with fewer companies holding larger market shares. This trend suggests thatsignificant consolidation activities, including mergers and acquisitions, and strategic expansions byleading firms like Tata Projects and Rail Vikas Nigam Ltd, have played a crucial role in shaping thecompetitive landscape.The fluctuations in HHI values highlight the evolving nature of the market, where competitivedynamics are increasingly influenced by strategic moves and sector-specific developments. Despitethe overall rise in concentration, the market remains competitive with opportunities for growth andexpansion.To enhance their market position, infrastructure companies should focus on differentiation throughinnovative solutions, form strategic alliances, invest in technology, and explore new geographicregions. Strengthening client relationships, improving operational efficiency, and developing robustmarketing strategies are also essential for sustaining growth and competitiveness.In conclusion, the infrastructure sector's competitive landscape is becoming more concentrated,driven by strategic consolidations and market expansions. Companies must adapt to these changes byimplementing strategic measures to secure and grow their market share effectively.62
Food and BeverageAbout the IndustryThe food and beverage sector are a significant segment within the consumer goods industry, playinga crucial role in the global economy. This sector encompasses a broad array of products, includingpackaged foods, beverages, snacks, and ready-to-eat meals. Operating primarily within the business-to-consumer (B2C) domain, the sector is directly influenced by consumer preferences andbehaviours.The food and beverage sector, a key segment within the consumer goods industry, plays a vital rolein the global economy. It includes a wide range of products such as packaged foods, beverages,snacks, and ready-to-eat meals. Operating predominantly in the B2C domain, this sector is directlyshaped by consumer preferences and behaviors. Companies must continuously innovate to keep pacewith evolving consumer demands, particularly as there is a growing focus on health, sustainability,and convenience.In this globalized market, there is a significant emphasis on localization, with companies tailoringtheir products to align with regional tastes and cultural preferences. This strategy allows majorplayers to expand their market presence while maintaining local relevance. Technologicaladvancements have also revolutionized the sector, from improvements in food processing andpackaging to the rise of e-commerce and digital marketing, enabling companies to reach a broaderaudience and offer more personalized experiences.(the working centre, n.d.)About the Selected CompaniesThe food and beverage sector is dominated by several key multinational corporations with strongbrand portfolios and extensive distribution networks. Among these, the following companies areparticularly noteworthy:Nestlé: As one of the largest food and beverage companies globally, Nestlé boasts a diverse portfoliothat includes brands like Nescafé, KitKat, and Maggi. The company has a significant presence acrossboth developed and emerging markets.(Nestle, n.d.)PepsiCo: Known for its wide array of beverages and snacks, including brands like Pepsi, Lay's, andQuaker, PepsiCo is a major force in the global food and beverage industry. (pepsicoindia, n.d.)The Coca-Cola Company: While best known for its flagship Coca-Cola beverage, the company hasdiversified into a range of soft drinks, juices, and other non-alcoholic beverages, maintaining adominant market position.(coca cola company, n.d.)Unilever: With strong representation in the food segment through brands like Knorr, Hellmann's, andBen & Jerry's, Unilever is a key player in both the food and personal care markets.(unilever,n.d.)Parle: Parle Products is one of India's leading food and beverage companies, known for its widerange of biscuits, snacks, and confectionery items. Parle-G, the company's flagship biscuit brand, is63
one of the best-selling biscuit brands globally. Parle's product portfolio also includes popular snackbrands like Monaco and KrackJack. The company has a strong presence in the Indian market and hasbeen expanding its footprint internationally, particularly in emerging markets.(parleproducts,n.d.)Changes in Market Dynamics Over the Last Five YearsOver the past five years, the food and beverage sector has undergone significant transformation,largely driven by evolving consumer behavior, technological advancements, and strategic businessactivities like mergers and acquisitions. One of the most notable trends is the shift towards health andwellness, with consumers increasingly seeking products that offer nutritional benefits. This change inconsumer preference has prompted companies to reformulate existing products and introduce newlines tailored to health-conscious buyers. Additionally, sustainability and ethics have become crucialin consumer decision-making, with growing pressure on companies to adopt sustainable practices,such as responsible sourcing and reducing carbon footprints. Brands that actively demonstrate theircommitment to sustainability are gaining increased favor among consumers.Another major shift has been the consolidation of the industry through high-profile mergers andacquisitions. These strategic transactions have enabled companies to achieve economies of scale,diversify their product portfolios, and expand into new markets, resulting in increased marketconcentration. Simultaneously, the rise of e-commerce and digital platforms has revolutionized howconsumers purchase food and beverages. Online grocery shopping, meal delivery services, anddirect-to-consumer models have surged in popularity, especially during the COVID-19 pandemic,prompting companies to invest heavily in digital marketing and distribution channels to staycompetitive.Innovation and new product development have also been key drivers of growth in the food andbeverage sector. Companies are increasingly investing in research and development to meetemerging consumer needs, focusing on areas such as plant-based alternatives, functional foods, andbeverages with added health benefits. This emphasis on innovation has not only enabled companiesto cater to shifting consumer preferences but has also spurred the introduction of a wide range of newproducts, further energizing the market and driving its evolution. (inifinite research, n.d.)HHI Index CalculationThis section of the report provides a detailed analysis of the market concentration within the foodand beverage sector using the Herfindahl-Hirschman Index (HHI). The HHI is calculated on a year-by-year basis from 2019 to 2023 to assess the level of market concentration across differentindustries within the sector.Year-wise HHI Calculation for Each Industry (2019-2023)The HHI is calculated using the following formula:HHI=∑i=1n(Si2)\text{HHI} = \sum_{i=1}^{n} (S_i^2)HHI=i=1∑n(Si2)Where:SiS_iSi is the market share of the iii-th firm in the industry, expressed as a percentage.nnn is the total number of firms in the industry.64
The index is computed for each year and each industry, with the results presented in the followingtables and charts.SL.NoYear201920202021202220231 ITC Limited0.0208610.0212270.0275240.0322980.0307672 Nestle India0.0464690.0490720.0642610.0523780.0924823 Hindustan Unilever Limited0.4437857 0.41419040.58945020.45217010.51055634 Britannia Ltd0.0333754 0.03323570.04269390.04208770.04199545 Pepsico0.0118900 0.00746830.00705570.00671770.00941356 Coca cola LTD0.0013484 0.00147040.00209410.00091070.00142207 Dabur India0.0119530 0.01096230.01438230.01154340.01100778 Parle0.0009417 0.00122570.00182310.00090250.00145449 Mother Diary0.0029729 0.00286320.00237640.00178620.001509910 Ferroro India0.0001990 0.00029310.00036750.00034630.0004664Sum 0.5737960 0.54200840.75202790.60114060.7010738multiply 100005737.9605420.0847520.2796011.4067010.738YearHHI20195737.96020205420.08420217520.27920226011.40620237010.738Data and Charts:2019: 5737.9602020: 5420.0842021: 7520.2792022: 6011.4062023: 7010.7380.0001000.0002000.0003000.0004000.0005000.0006000.0007000.0008000.000HHIFrom 2019 to 2023, the market has consistently shown high concentration levels, as indicated byHHI values above 2,500. In 2019, the HHI was 5737.960, pointing to a market dominated by a fewlarge players. While there was a slight decrease in 2020 to 5420.084, the market remained highlyconcentrated. In 2021, the HHI surged to 7520.279, suggesting increased dominance by major65
companies, possibly due to mergers or acquisitions. Although the HHI dropped to 6011.406 in 2022,indicating a slight rise in competition, it climbed again to 7010.738 in 2023, reaffirming thedominance of a few firms.Analysis and InterpretationTrends in Market Concentration (2019-2023):The market has consistently exhibited high levels of concentration over the years, as reflected byHHI values well above 2,500. Starting in 2019, the HHI was 5737.960, indicating that the marketwas heavily dominated by a few large players. Despite a slight decrease in concentration in 2020,with the HHI dropping to 5420.084, the market remained highly concentrated. In 2021, there was asignificant increase in concentration, with the HHI rising sharply to 7520.279, suggesting thatdominant firms further consolidated their market positions, likely through mergers and acquisitions.Although 2022 saw a decrease in the HHI to 6011.406, indicating a marginal increase in competitionor redistribution of market share, the HHI climbed again in 2023 to 7010.738, reaffirming the strongdominance of a few key players.Impact of M&A Activities on HHI Values:Mergers and acquisitions have played a critical role in driving these trends. The sharp rise in the HHIin 2021 can be attributed to significant M&A activity, where major firms absorbed competitors orsmaller players, thereby increasing their market share and concentration. This pattern is indicative ofa market where competition is increasingly limited as fewer companies control larger portions of themarket.Examples of Industries with Varying ConcentrationBeverage Industry:This industry has shown a trend towards increasing concentration, with HHIvalues indicating a moderately concentrated market. The growing concentration suggests that a fewlarge firms are consolidating their positions, likely through strategic M&A activities.Snack Foods Industry:Like the beverage industry, the snack foods sector has experienced a gradualincrease in concentration. The HHI values reflect moderate concentration, pointing to the dominanceof a few key players over time.Packaged Foods Industry:This industry is characterized by consistently high HHI values, above2,500, indicating a highly concentrated market. The dominance of a small number of firms is likelydue to significant M&A activity over the years, leading to reduced competition.Comparison with Industry Benchmarks:When comparing these trends with industry benchmarks, it becomes evident that the food andbeverage sectors are experiencing a shift towards higher concentration. The general benchmark forhigh concentration is an HHI above 2,500, which is consistently surpassed in the Packaged Foodsindustry, indicating a much higher concentration than typically seen in other sectors. This trend isless pronounced but still significant in the Beverage and Snack Foods industries, where concentration66
is steadily increasing, albeit at a moderate level. These trends suggest that M&A activities are leadingto greater market consolidation across these sectors, potentially impacting competition, pricing, andconsumer choice.InterpretationAcross the food and beverage sectors, the HHI values consistently indicate a highly concentratedmarket. An HHI value above 2,500 is considered a threshold for high concentration, where only afew firms dominate the market. The Packaged Foods industry has HHI values consistently wellabove this threshold, suggesting that this industry is tightly controlled by a small number of powerfulplayers. This level of concentration often results in reduced competition, as smaller firms find itdifficult to compete against the market leaders.M&A activities are a significant factor contributing to the observed increase in market concentration.For example, the sharp increase in the HHI in 2021, jumping to 7520.279, is indicative of majorM&A events where large companies either merged with or acquired competitors, thus consolidatingtheir market positions. When a merger occurs, the combined entity typically has a larger marketshare, which directly impacts the HHI by increasing it, as the market becomes more concentrated.The pattern of rising and falling HHI values in subsequent years could reflect ongoing adjustments inthe market as firms integrate their acquisitions or as new competitors enter and exit the market.Sector-Specific Insights:Beverage IndustryThe Beverage industry shows a moderately concentrated market with increasing HHI values over theyears. This suggests a trend where a few large firms are solidifying their dominance, likely throughstrategic acquisitions. The increasing concentration could lead to a market where a few beveragegiants control a significant portion of the market, potentially influencing pricing and limiting theavailability of niche or smaller brands.Snack Foods IndustrySimilarly, the Snack Foods industry is also becoming more concentrated, with HHI values indicatinga trend towards moderate concentration. This gradual increase in concentration suggests that keyplayers are expanding their market shares, possibly through acquisitions of smaller snack companiesor by driving them out of the market.Packaged Foods IndustryThe Packaged Foods industry is the most concentrated of the three, with consistently high HHIvalues. The dominance of a few firms in this industry suggests that consumers have fewer choices, asthe market is controlled by a small number of large companies. This high concentration is likely theresult of aggressive M&A strategies, where large firms have continuously absorbed competitors,leading to reduced competition.Implications for Competition and Consumer ChoiceHigh market concentration, as indicated by rising HHI values, typically leads to a less competitiveenvironment. In such markets, dominant firms can exert greater control over prices, which may lead67
to higher prices for consumers. Additionally, high concentration can stifle innovation, as dominantfirms may have less incentive to innovate in the absence of strong competition. For consumers, thiscould mean fewer choices, as market leaders might focus on their most profitable products whilephasing out niche or experimental offerings.Broader Market Trends:The trends observed in these industries reflect a broader pattern ofconsolidation within the food and beverage sectors. As firms grow through M&A, the marketbecomes increasingly concentrated, which can have long-term impacts on market dynamics. WhileM&A can lead to efficiencies and economies of scale, benefiting the firms involved, it can alsoreduce the overall competitiveness of the market, which can negatively impact consumers andsmaller businesses.Regulatory Considerations:High market concentration often attracts the attention of regulators,particularly if it results in anti-competitive behavior. The significant increase in HHI values,especially in 2021, may raise concerns about the potential for monopolistic practices or unfaircompetition. Regulatory bodies may scrutinize further M&A activities in these industries to ensurethat competition remains fair and that consumers are not adversely affected.Impacts of Market ConcentrationMarket concentration, as measured by the Herfindahl-Hirschman Index (HHI), has far-reachingimplications for competition, consumer choice, pricing, innovation, and regulatory oversight. Asindustries become more concentrated, the balance of power shifts, often leading to significantchanges in the market dynamics.Effects on CompetitionReduced Competition:High market concentration typically results in fewer firms dominating themarket, which reduces competition. In a highly concentrated market, the largest firms can exertsignificant control over market dynamics, potentially driving out smaller competitors or preventingnew entrants from gaining a foothold. This can create barriers to entry, as smaller firms struggle tocompete against established giants with substantial resources.Market Power:Dominant firms in concentrated markets often have the power to influence prices,set industry standards, and dictate terms to suppliers and distributors. This can lead to a lesscompetitive environment where innovation and efficiency are deprioritized.Impact on Consumer ChoiceLimited Options:As market concentration increases, consumer choice tends to diminish. When afew large firms control the market, they often focus on their most profitable products, reducing thediversity of available offerings. This can lead to a homogenization of products, where consumershave fewer options in terms of brands, features, and pricing tiers.Quality Concerns:With less competition, there may be less incentive for dominant firms tomaintain high-quality standards. In a competitive market, companies strive to differentiatethemselves through quality, but in a concentrated market, this pressure is reduced, potentially leadingto a decline in product quality.68
Influence on PricingIn highly concentrated markets, dominant firms often have the power to set prices at levels thatmaximize their profits, potentially at the expense of consumers. With limited competition, thesefirms face less pressure to keep prices low, which can lead to higher costs for consumers. The lack ofcompetitive alternatives allows these dominant players to control pricing dynamics, prioritizingprofit margins over consumer welfare.Additionally, high market concentration can sometimes result in price coordination among theleading firms, whether explicitly or implicitly. This can manifest as price fixing or collusion, wherecompanies agree to maintain prices at a certain level, further distorting the market and harmingconsumers. Such practices undermine the competitive landscape, leading to reduced marketefficiency and limiting consumer choice.Effect on InnovationIn highly concentrated markets, the largest firms often have less incentive to innovate. With reducedcompetition, the urgency to outpace rivals by developing new products, services, or technologiesdiminishes. This lack of competitive pressure can lead to a stagnation in innovation, wherecompanies become complacent, relying on established products and processes rather than investingin research and development to drive meaningful advancements.Instead of pursuing innovation, dominant firms may shift their focus to cost-cutting measures tomaintain or increase profit margins. This approach can lead to a reduction in product quality or aconcentration on incremental improvements rather than breakthrough innovations. Such strategiesprioritize short-term profitability over long-term growth and development, ultimately limiting thepotential for significant advancements in the market.Regulatory Considerations and Potential Antitrust ConcernsHigh market concentration frequently draws the attention of regulatory bodies tasked withmaintaining fair competition in the market. Antitrust laws are specifically designed to preventmonopolistic practices that could harm consumers and the broader economy. Regulators mayinvestigate dominant firms for engaging in anti-competitive behaviors, such as predatory pricing,exclusive agreements, or efforts to create barriers to entry that stifle competition. These actions arecrucial in ensuring that markets remain dynamic and competitive, benefiting consumers with betterchoices and fairer prices.When market concentration reaches extreme levels, regulators may resort to antitrust actions toprevent further consolidation or to dismantle existing monopolies. Such actions can include blockingproposed mergers that would exacerbate market concentration, imposing fines on companies for anti-competitive practices, or requiring firms to divest certain assets to restore competitive balance.Regulatory agencies, like the Federal Trade Commission (FTC) in the United States or the EuropeanCommission, often use the Herfindahl-Hirschman Index (HHI) as a tool to assess the impact ofmergers on market concentration. If a merger is projected to significantly increase the HHI, it mayface heightened scrutiny or even rejection to safeguard market competition.69
Industry Comparison: HHI Trends Across B2C Sectors in the Food and Beverage IndustryTo understand the competitive dynamics within the food and beverage industry, it's important tocompare the HHI trends across different business-to-consumer (B2C) sectors, such as the Beverage,Snack Foods, and Packaged Foods industries. This comparison will reveal broader market trends andprovide insights into how concentration levels are evolving within each sector.Comparative Analysis: Market Concentration in Food and Beverage vs. Hospitality IndustriesTo draw a parallel between the Food and Beverage industry and the Hospitality industry, it's essentialto examine the market concentration trends, competitive dynamics, and industry-specific factors thatinfluence these sectors. Below is a comparison like the one provided for the Beverage, Snack Foods,and Packaged Foods industries, focusing on key segments within the Hospitality industry.1. Hotel IndustryHHI Trends: The Hotel industry shows a relatively low concentration compared to the Food andBeverage industry. The HHI values typically fall within a range that indicates a competitive market,although there has been a gradual increase in concentration due to the expansion of major hotelchains and mergers.Market Dynamics: While global hotel chains like Marriott, Hilton, and InterContinental have asignificant presence, the industry remains fragmented, with many small and independent hotelsoperating alongside these giants. This fragmentation allows for considerable competition,particularly in specific regions or market segments like luxury, budget, and boutique hotels.However, consolidation is slowly increasing, as large hotel groups acquire smaller chains orindependent properties to expand their portfolios.2. Restaurant IndustryHHI Trends: The Restaurant industry, particularly in the quick-service and casual dining segments,shows moderate concentration. The industry is dominated by several large chains (e.g., McDonald's,Starbucks, Yum! Brands), but there remains a substantial presence of independent and regionalplayers, keeping the overall concentration at a moderate level.Market Dynamics: Like the Snack Foods industry, the restaurant sector is marked by the dominanceof large chains that continue to grow through franchising, mergers, and acquisitions. However, theindustry remains diverse, with significant room for small businesses, particularly those offeringunique or locally-sourced cuisine. The market's concentration is increasing, but the diversity ofdining preferences and the popularity of local and niche establishments help maintain competition.3. Travel Services IndustryHHI Trends: The Travel Services industry, which includes online travel agencies (OTAs), touroperators, and other travel-related services, is moderately concentrated. A few dominant players likeExpedia, Booking Holdings, and Airbnb control a large portion of the market, particularly in onlinebookings and accommodations.Market Dynamics: The concentration in this sector is largely driven by the dominance of a few majorplatforms that have become essential intermediaries between consumers and service providers.70
Despite this, there is still competition from smaller, specialized agencies and emerging platforms,particularly those focusing on niche travel experiences or sustainable tourism. The industry has seensignificant M&A activity, particularly among OTAs, leading to higher concentration in certainsegments.Implications of Market ConcentrationHigh market concentration often results in a few dominant firms controlling the market, which canstifle competition and create barriers for smaller entrants. This reduced competition can lead todiminished consumer choice as these leading firms focus on their most profitable products, resultingin a homogenization of product offerings. Additionally, these dominant players may exert significantcontrol over pricing, potentially leading to higher prices for consumers due to their pricing power.Moreover, the lack of competition can result in innovation stagnation, as dominant firms mayprioritize cost-cutting measures over the development of new products. This focus on maintainingprofit margins at the expense of innovation can hinder the introduction of diverse andgroundbreaking products in the market. In summary, the food and beverage sector has undergonesignificant changes, driven by market dynamics, consumer preferences, and strategic businessactivities, with far-reaching implications for competition, pricing, and regulatory oversight.RecommendationsTo mitigate the negative effects of high market concentration in the food and beverage sector, it'sessential to strengthen regulatory oversight. Governments and regulatory bodies should enforcestricter antitrust regulations and scrutinize mergers and acquisitions to maintain a competitive marketlandscape. This approach can help prevent dominant firms from exerting excessive control overpricing and stifling competition, ultimately protecting consumers and ensuring a diverse range ofproduct offerings.Additionally, fostering innovation should be a priority. Offering incentives such as tax breaks, grants,and support for research and development can encourage companies, particularly smaller firms, toinvest in new product development and technological advancements. By promoting a culture ofinnovation, the industry can avoid stagnation and continue to meet evolving consumer needs,ensuring long-term growth and resilience in the market.ConclusionIn conclusion, the food and beverage sector's increasing market concentration poses significantchallenges, including reduced competition, higher prices, and potential stagnation in innovation.These issues underscore the importance of robust regulatory oversight and strategic incentives tomaintain a healthy, competitive market environment. By enforcing stricter antitrust measures andencouraging innovation through targeted incentives, the sector can continue to evolve, offeringdiverse products, fair pricing, and sustained growth. Addressing these concerns proactively willensure that the industry remains dynamic, consumer-focused, and capable of adapting to futurechallenges.71
Media and EntertainmentAbout the IndustryThe media and entertainment sector are experiencing rapid growth and emerging as a significantplayer in economy. This expansion has been fueled by rising incomes, more affordable and fasterinternet access, and increase in the consumer purchases. The Indian M&E industry is characterizedby its high volume and a consistently growing Average Revenue Per User (ARPU), distinguishing itfrom other global markets.According to FICCI-EY analysis that the ratio of advertising to GDP will rise from 0.38% in 2019 to0.4%by2025.Source https://www.angelone.in/blog/top-media-entertainment-stocks-market-sharesAbout the Selected CompaniesZee Entertainment Enterprises Limited72
Founded in 1992 and with its headquarters located in Mumbai, it is a prominent media andentertainment corporation in India. It runs a wide range of TV stations in different genres., includingZee TV, Zee Cinema, and regional channels, along with the digital platform ZEE5. Zee has a strongpresence in India and internationally, reaching over 190 countries. Financially, it reports annualrevenues exceeding 8,000 crores). Led by CEO Punit Goenka, Zee is focused on digital expansion₹and content creation. The proposed merger with Sony Pictures Networks India could significantlyreshape the industries. (zee, n.d.)SUN TVSun TV Network Limited, based in Chennai, is a leading media company in South India, founded in1993 by Kalanithi Maran. It operates a wide range of TV channels in various languages with Sun TVbeing its flagship channel. The company has a strong market presence and consistently reports highrevenues, exceeding 4,000 crores Sun TV is expanding its digital reach through its OTT platform,₹Sun NXT, and continues to focus on high-quality content and strategic growth in the regional market.(suntv, n.d.)PVR INOXPVR Cinemas and INOX Leisure merged to establish PVR INOX, the biggest movie theatre chain inIndia. in 2023. It operates over 1,600 screens across more than 100 cities, offering premium movieexperiences. The company, led by Ajay Bijli, focuses on expanding its screen count, upgradingtechnology, and enhancing luxury formats, PVR INOX, formed by the merger of PVR Cinemas andINOX Leisure, reports annual revenues exceeding 4,000 crores This revenue figure reflects the₹combined financial strength of the two entities and their extensive operations across India.(pvr,n.d.)Viacom18 Media Private Viacom18 Media Private is a major Indian media company. It operates popular TV channels likeColors TV and MTV India and runs the OTT platform Voot. Viacom18 generates significant revenuefrom advertising and subscriptions, with a strong presence in both television and digital media.However, Network18, which encompasses Viacom18, reported consolidated revenues ofapproximately 7,500 crore includes revenues from Viacom18's diverse media operations, including₹TV channels and the Voot OTT platform.73
Star IndiaStar India, a subsidiary of The Walt Disney Company, is a leading media company in India, knownfor its popular TV channels like Star Plus and Star Sports, and its OTT platform Disney+ Hotstar. Ithas a significant presence in both traditional and digital media. While exact standalone revenuefigures aren't available, Star India contributes to Disney's substantial direct-to-consumer revenue,which was over $30 billion in 2023. The company focuses on content innovation, digital expansion,and maintaining its market leadership amid strong competition.Balaji Telefilms LimitedBalaji Telefilms Limited, founded by Ekta Kapoor, is a major Indian media company known for itsTV serials, films, and digital content through its OTT platform ALTBalaji. The company reportedrevenues of about 400 crores in 2023. It focuses on expanding its digital presence and content₹offerings, competing in a dynamic media landscape.Network18 Media & Investments Ltd Network18 Media & Investments Ltd., part of the Reliance Industries Group, is a major Indian mediaconglomerate with a diverse portfolio including CNN-News18, CNBC-TV18, and Colors TV. Itreported revenues of about 7,500 crores (~$900 million) in 2023. The company focuses on₹expanding its digital presence and content offerings while facing strong competition in the mediasector.Sony Pictures Network IndiaSony Pictures Network India (SPNI), part of Sony Pictures Entertainment, is a key media player inIndia. It operates popular TV channels like Sony TV and Sony Max, and the OTT platform SonyLIV. SPNI contributes significantly to Sony's media revenues in India and focuses on expanding itscontent and digital services amid strong competition. Sony's overall media networks, which includeSPNI, have seen significant revenue contributions, with estimates placing SPNI's contribution in therange of several billion dollars annually.Times MediaTimes Media, part of The Times Group, is a major media entity in India with a strong presence inprint (e.g., Times of India), television (e.g., Times Now), and digital platforms. It is a leading playerin the Indian media market, with significant revenue contributions estimated between 2,500 and₹74
3,000 crores annually. The group focuses on expanding its digital reach and maintaining leadership₹across its media assets.Disney's Acquire of 21st Century Fox: Mergers, Acquisitions, and Impact on HHI IndexThe acquisition led to an increase in the HHI, as Disney consolidated a large share of the filmand television content market. This merger reduced the major competitors in the industry,elevating the market concentration.Amazon Prime Video and Hotstar:Amazon Prime Video’s strategic investments and partnerships with Hotstar have contributed toan increase in HHI in the streaming sector. As Amazon consolidates its market presence, theconcentration of market share among major streaming platforms has risen, reflecting a higherHHI.HHI Index CalculationConverting into decimals75
SquaringInterpretation:Herfindahl-Hirschman Index (HHI) InterpretationHHI < 1,500Less concentration.HHI between 1,500 and 2,500moderate concentrationsHHI > 2,500high concentration.HHI Calculation Results:2019:346.0042020:386.6422021:411.41676
2022: 99.6922023:46.531 Year on year market cap reaction and HHI Interpretation2019: The industry in 2019 had a very low level of concentration. With an HHI well below 1,500,it suggests a highly competitive market with many players holding relatively small market shares.2020:In 2020, the HHI slightly increased, but it still indicated a low concentration. The marketremained competitive, though there was a slight movement toward increased concentration,possibly due to mergers, acquisitions, or the growth of certain firms.2021:The trend continued in 2021 with a further increase in HHI, indicating a modest rise inmarket concentration. However, the industry remained highly competitive, with no single playeror group of players dominating the market.2022:The HHI value for 2022 dropped significantly, suggesting a sharp decrease in marketconcentration. This could imply that the market became even more competitive, with many firmsgaining or retaining market share, or it could indicate the entry of new competitors diluting themarket concentration.2023:The HHI decreased further, indicating extremely low market concentration. This suggestsan even more competitive environment with a very dispersed market structure, possibly due to anincrease in the firms or a further distribution of market share among existing players.Market cap reaction2019 to 2021:The gradual increase in HHI from 2019 to 2021 indicates a slight trend towardshigher concentration, which could reflect the consolidation of market share among fewer firmsor some firms outperforming others in terms of market capitalization. However, the industryremained highly competitive overall.2022 to 2023:The significant drop in HHI in 2022 and 2023 indicates a shift towards a morecompetitive market with a much more even distribution of market shares. This could be due toincreased competition, regulatory changes, or a significant number of new entrants into themarket, which diluted the concentration and possibly led to fluctuations in market capitalizationacross firms.Analysis and InterpretationTrends in Market Concentration Over the Years:77
2019-2021: Gradual Increase in ConcentrationObservation:The HHI values show a gradual increase from 346.004 in 2019 to 411.416 in 2021.Interpretation:This suggests a slight trend towards higher market concentration, possibly due tostronger firms gaining more market share or some level of consolidation happening within theindustry. However, the overall concentration remained low, indicating that the market was stillhighly competitive.2022-2023: Sharp Decline in ConcentrationObservation:In 2022, the HHI dropped significantly to 99.692, and it further decreased to46.531 in 2023.Interpretation:This sharp decline in HHI indicates a substantial decrease in marketconcentration. The market became more fragmented, possibly due to the entry of the new playersor the redistribution of market shares among existing This trend suggests an increase incompetition within the industry, leading to a more balanced market structure.Impact of Mergers, Acquisitions, or Exits on HHI ValuesPotential Impact:Typically, mergers and acquisitions lead to an increase in HHI values asthey result in the consolidation of market share among fewer firms. This could explain thegradual increase in HHI from 2019 to 2021. During this period, any significant M&A activitywould have contributed to the increasing concentration. If large players exit the market, itcould either increase or decrease the HHI depending on the redistribution of their marketshare. However, the sharp decline in HHI from 2022 to 2023 suggests that exits were likelyaccompanied by the entry of new players or an even distribution of the exiting firm's marketshare among many competitors, leading to reduced concentration.Examples of Industries with Increasing or Decreasing ConcentrationIncreasing Concentration: Streaming Services:The video streaming industry has seen increasing concentration, especially like Netflix, AmazonPrime, Disney dominating the market. Consolidations, such as Disney's acquisition of 21st CenturyFox, streaming services have further concentrated market power among a few giants.Decreasing Concentration:Podcasting78
The podcasting industryhas experienced decreasing concentration due to the rise of independentpodcasters and a variety of platforms that host content. While some big players like Spotify areinvesting heavily in exclusive content, the overall industry remains highly fragmented withnumerous small creators.Comparison with Industry Standards or BenchmarksCompetitive Market: An HHI of <1,500 typically indicate a competitive market. The valuesfrom 2019 to 2023 are well below this threshold, suggesting that the industry in question ishighly competitive relative to industry standards.Moderately Concentrated Market:An HHI between 1,500 and 2,500 indicates moderateconcentration, where a few firms hold significant market share, but competition still exists. Theindustry in question has consistently shown much lower HHI values, further reinforcing thenotion of low concentration.High Concentrated Market: An HHI > 2,500 indicate a highly concentrated often leading toconcerns about monopoly or oligopoly. The industry under review has never approached thislevel, indicating that it does not face the risks associated with high concentration, such as reducedcompetition or consumer choice.Impacts of Market ConcentrationLower market concentration typically leads to increased competition as there are more firms in themarket with relatively equal market shares. This creates a dynamic environment where companiescontinuously strive to improve their offerings to gain or maintain market shareInfluence on Pricing and InnovationIncreased competition often results in competitive pricing as firms attempt to attract and retaincustomers. With lower market concentration, no single entity has significant pricing power. Thistypically leads to lower prices for consumers, as companies are incentivized to offer competitiverates., this could mean lower subscription fees, reduced advertising costs, and more value-drivenofferings.79
Case Studies of Companies or Industries Impacted by High Market ConcentrationThe Disney acquisition of 21st Century FoxIt has significantly increased Disney’s market share in the entertainment industry. This led toconcerns about reduced competition in the film and television sectors, particularly regarding thediversity of content and the potential for higher prices in streaming services and movie theatres.Regulatory bodies scrutinized the merger for its potential impact on competition and consumerchoiceThe AT&T and Time Warner mergerThis is a prime example of how high market concentration can attract regulatory scrutiny. Themerger combined a major content creator with a leading content distributor such as prioritizing TimeWarner content over competitors' content on AT&T’s platforms.Examples of Market Concentration in B2C IndustriesSpecific Examples of Companies or Sectors with Significant HHI Changes:The social media industry saw a rise in concentration with the acquisitions of Instagram andWhatsApp by Facebook (now Meta). These acquisitions consolidated Meta's dominance in socialmedia, leading to a significant increase in HHI, reflecting the reduced competition in the socialmedia landscape.Potential Future Scenarios Based on Current TrendsThe development of new technologies, such as virtual reality (VR) or blockchain-based contentplatforms could disrupt the current market structure. If new entrants leverage these technologieseffectively, they could challenge the dominance of existing players, leading to a more fragmentedand competitive market with a corresponding decrease in HHI.Comparison of HHI Trends Across Different B2C SectorsMedia and Entertainment:This sector has seen increasing HHI trends in certain segments, particularly streaming services andfilm production, driven by major mergers and acquisitions (e.g., Disney-Fox, WarnerMedia-Discovery). However, sectors like digital media and content creation have experienced decreasingHHI due to the rise of numerous independent creators and platforms.Identification of Broader Market Trends80
Across various B2C sectors, there has been a notable trend towards consolidation through mergersand acquisitions. This has led to increased market concentration in industries liketelecommunications, media and entertainment, and retail. The driving force behind this trend is oftenthe desire to gain market share, reduce competition, Consumer preferences are evolving, particularlytowards more personalized and niche products and services. This is leading to a fragmentation incertain markets, as new entrants cater to specific consumer needs, resulting in decreased HHI inindustries like e-commerce and digital media.Insights Gained from the Comparative AnalysisInnovation is a key driver of market structure changes. In sectors where innovation is rapid (e.g.,automotive with EVs, media with streaming services), market concentration tends to fluctuate as newplayers enter and disrupt established hierarchies. This suggests that companies need to stay agile andinvest in innovation to maintain competitive advantage. Different B2C sectors are experiencingdiverging paths of market concentration. While some industries are seeing increased concentrationdue to consolidation (e.g., telecommunications, media), others are witnessing fragmentation due tonew entrants and technological disruptions (e.g., digital media, automotive). This highlights thecomplexity of market dynamics and the need for tailored strategies in response to industry-specifictrends.FindingsThe Indian Media and Entertainment (M&E) industry is experiencing rapid growth, driven by risingincomes, affordable internet access, and increased consumer spending. This expansion is evident inthe consistent growth of Average Revenue Per User (ARPU), distinguishing the Indian market fromother global counterparts. Additionally, the advertising-to-GDP ratio is projected to rise from 0.38%in 2019 to 0.4% by 2025, reflecting the increasing importance of advertising in the economiclandscape.Mergers and acquisitions have significantly impacted the M&E sector, with major deals such asDisney’s acquisition of 21st Century Fox and Amazon Prime Video’s partnership with Hotstar. Thesestrategic moves have resulted in heightened market concentration, as demonstrated by the risingvalues of the Herfindahl-Hirschman Index (HHI). The fluctuations in HHI values over the yearsindicate a dynamic industry, with varying degrees of concentration reflecting the ongoing changes inmarket dynamics.Market concentration trends reveal a gradual increase from 2019 to 2021, suggesting consolidationamong key players in the industry. However, the period from 2022 to 2023 saw a significant decline81
in concentration, indicating a shift towards a more competitive environment characterized byincreased market fragmentation. This evolution highlights the adaptability of the Indian M&Eindustry as it responds to changing consumer preferences and competitive pressures.RecommendationsStrategic expansion and diversification are crucial for companies aiming to capture a larger share ofthe rapidly growing digital media market. By focusing on enhancing their digital platforms andbroadening content offerings, firms can better position themselves to meet evolving consumerdemands. Diversifying into emerging sectors such as over-the-top (OTT) services and digital contentnot only helps companies stay competitive but also opens new revenue streams, allowing them toadapt to changing market dynamics.Leveraging mergers and acquisitions is another effective strategy for enhancing market position andaccessing new technologies or markets. However, companies must approach these moves withcaution, being mindful of regulatory scrutiny and the potential impacts on market concentration.Forming partnerships and collaborations that yield synergistic benefits can be advantageous, but it isessential to avoid anti-competitive practices that could attract legal challenges or damage reputations.Innovation is key in the M&E industry and investing in cutting-edge technologies and creativecontent can help firms differentiate themselves from competitors. Exploring new formats, such asvirtual reality (VR) and blockchain-based platforms, can provide significant competitive advantagesand unlock new revenue opportunities. By staying ahead of technological trends, companies canengage a wider audience and enhance their market appeal.Monitoring market dynamics is vital for adapting strategies effectively. Regularly tracking marketconcentration metrics and competitive landscapes enables firms to navigate potential challengeswhile seizing emerging opportunities. Staying informed about regulatory changes and industry trendsfurther empowers companies to refine their approaches and remain agile in a fast-paced environment.Enhancing consumer engagement is essential for driving success in the digital age. Companiesshould prioritize personalized content and interactive platforms to foster deeper connections withtheir audiences. Implementing data-driven strategies to understand consumer preferences can lead tomore effective marketing and content strategies, ultimately improving customer satisfaction andloyalty. By proactively engaging with consumers, firms can create a more compelling brand presenceand sustain long-term growth in the competitive M&E landscape.ConclusionIn conclusion, the Indian Media and Entertainment industry is poised for significant growth, drivenby digital expansion, strategic mergers, and innovative content creation. Companies that prioritizediversification into emerging sectors like OTT and leverage technological advancements will bebetter equipped to navigate the evolving landscape. By fostering partnerships and ensuringcompliance with regulatory standards, firms can enhance their market positions while minimizingrisks associated with anti-competitive practices.Ultimately, a focus on consumer engagement and data-driven strategies will be essential for success.As the industry continues to adapt to changing consumer preferences and technological innovations,companies that remain agile and proactive in their approaches will not only capture new revenue82
streams but also build lasting relationships with their audiences. Embracing these strategies willenable firms to thrive in a competitive environment and contribute to the overall dynamism of theIndian M&E sector.References(n.d.). Retrieved from https://en.wikipedia.org/wiki/Pharmaceutical_industry_in_India.(n.d.). Retrieved from https://www.integrichain.com/blog/thoughts-following-asembia-2023-industry-fragmentation-and-disruption/.83
(n.d.). Retrieved from https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.lifegenix.in%2F5-best-pharma-companies-in-vapi&psig=AOvVaw3zgprjHOwrV9xeqmL8lb1J&ust=1724605369636000&source=images&cd=vfe&opi=89978449&ved=0CBQQjRxqFwoTCPjqvueNjogDFQAAAAAdAAAAABAE: https://www.lifegenix.in/5-best-pharma-companies-in-vapi(n.d.). Retrieved from https://www.lifegenix.in/5-best-pharma-companies-in-vapi(n.d.). Retrieved from Statista: https://www.statista.com/topics/1764/global-pharmaceutical-industry/(n.d.). Retrieved from cipla: https://www.cipla.com/(n.d.). Retrieved from pfizer: https://www.pfizer.com/(n.d.). Retrieved from Zydus Lifesciences: https://www.zyduslife.com/zyduslife/(n.d.). Retrieved from https://www.drreddys.com/(n.d.). Retrieved from Dr. Reddy’s Laboratories Ltd: https://www.drreddys.com/(n.d.). Retrieved from Lupin: https://www.lupin.com/(n.d.). Retrieved from Torrent Pharma: https://www.torrentpharma.com/(n.d.). Retrieved from Divi’s Laboratories: https://www.divislabs.com/(n.d.). Retrieved from Sun Pharma: https://sunpharma.com/(n.d.). Retrieved from GlaxoSmithKline Pharmaceuticals Ltd (GSK): https://www.gsk.com/en-gb/home/(n.d.). Retrieved from Ajanta Pharma: https://www.ajantapharma.com/(n.d.). Retrieved from https://www.capitaline.com/(n.d.). Retrieved from statista: https://www.statista.com/statistics/263102/pharmaceutical-market-worldwide-revenue-since-2001/(n.d.). Retrieved from genengenews: https://www.genengnews.com/news/lupin-acquires-symbiomix-therapeutics-for-150m/#:~:text=Lupin%20said%20today%20it%20has,women's%20health%20specialty%20drug%20business.(n.d.). Retrieved from drreddys: https://www.drreddys.com/cms/cms/sites/default/files/2024-06/Press%20release%20-%20Dr.%20Reddy%27s%20to%20acquire%20Nicotinell%20consumer%20healthcare.pdf84
(n.d.). Retrieved from sunpharma: https://sunpharma.com/wp-content/uploads/2024/06/Press-Release-Sun-Pharma-Completes-Taro-Merger.pdf(n.d.). Retrieved from business stnadard: https://www.business-standard.com/article/companies/aurobindo-acquires-uk-generics-firm-milpharm-106021101043_1.html#:~:text=Aurobindo%20Pharma%20has%20acquired%20business,the%20%C2%A37.7%20million%20company.(n.d.). Retrieved from Business Standard: https://www.business-standard.com/article/companies/aurobindo-acquires-uk-generics-firm-milpharm-106021101043_1.html#:~:text=Aurobindo%20Pharma%20has%20acquired%20business,the%20%C2%A37.7%20million%20company.(n.d.). Retrieved from NBER: https://www.nber.org/reporter/fall-2006/economics-pharmaceutical-industry(n.d.). https://www.researchgate.net/publication/350236570_Case_Study_On_Maruti_Suzuki: Research gate.(n.d.). Retrieved from the working centre: https://www.theworkingcentre.org/food-and-beverage-industry/700(n.d.). Retrieved from Nestle: https://www.nestle.in/(n.d.). Retrieved from pepsicoindia: https://pepsicoindia.co.in/(n.d.). Retrieved from coca cola company: https://www.coca-colacompany.com/(n.d.). Retrieved from unilever: https://www.unilever.com/(n.d.). Retrieved from parleproducts: https://www.parleproducts.com/(n.d.). Retrieved from inifinite research: https://www.infinitiresearch.com/thoughts/food-and-beverage-industry-trends-five-years/(n.d.). Retrieved from http://www.nccltd.in/(n.d.). Retrieved from http://www.tataprojects.com/(n.d.). Retrieved from http://www.rvnl.org/(n.d.). Retrieved from http://www.ircon.org/(n.d.). Retrieved from http://www.ahluwaliacontracts.com/(n.d.). Retrieved from http://www.pncinfra.com/85
(n.d.). Retrieved from http://www.nagarjunaconstruction.com/(n.d.). Retrieved from http://www.dilipbuildcon.com/(n.d.). Retrieved from http://www.lodhagroup.in/(n.d.). Retrieved from http://www.ashokabuildcon.com/(n.d.). Retrieved from https://en.wikipedia.org/wiki/Herfindahl%E2%80%93Hirschman_index(n.d.). Retrieved from https://en.wikipedia.org/wiki/Herfindahl%E2%80%93Hirschman_index(n.d.). Retrieved from https://www.ibef.org/industry/infrastructure-sector-india(n.d.). Retrieved from zee: https://www.zee.com/(n.d.). Retrieved from suntv: https://www.sunnetwork.in/(n.d.). Retrieved from pvr: https://www.pvrcinemas.com/(2019). Retrieved from Ford: https://media.ford.com/content/fordmedia/fna/us/en/news/2019/10/01/mahindra-ford-joint-venture-india.html(2020). Retrieved from startuptalky: https://startuptalky.com/indian-automobile-industry/(2021). Retrieved from www2.deloitte.com: www2.deloitte.com(2021). Retrieved from nielseniq.com: nielseniq.com(2023). Retrieved from indiatoday: https://www.indiatoday.in/auto/latest-auto-news/story/maruti-suzuki-fronx-based-toyota-taisor-ready-to-debut-on-april-3-2516269-2024-03-18(2024, april Apr, 2024). Retrieved from https://www.ibef.org/exports/pharmaceutical-exports-from-india: https://www.ibef.org/exports/pharmaceutical-exports-from-india(22/7/2024). Retrieved from economictimes: https://economictimes.indiatimes.com/industry/auto/auto-news/suzuki-sees-indias-automobile-market-growing-fivefold-by-2047/articleshow/111913791.cms?from=mdrA, s. a. (2022). HHI and Competition Policy in Energy Markets. Energy Policy Review.Aashna Mehta, H. H. (2016). PLoS ONE. Retrieved from elicit: https://elicit.com/notebook/e615cc1f-56d3-43dd-88c6-31e663c07cc8#17eedcbca43ad7647c413e2a43fa457c86
(n.d.). Ahluwalia Contracts (India) Ltd.(n.d.). Ashoka Buildcon.auto.economictime. (2024). Retrieved from https://auto.economictimes.indiatimes.com/news/industry/businesstoday. (2024). Retrieved from https://www.businesstoday.in/auto/story/tata-motors-is-now-breathing-down-on-hyundai-with-its-1201-pv-market-share-314829-2021-12-08Chong., L. N. (2020). p. 11.DGCI&S. (2023, MARCH 13). Retrieved from https://drugscontrol.org/pdf/exports130323113006.jpg: https://drugscontrol.org/news-detail.php?newsid=35003(n.d.). Dilip Buildcon.Dinesh Khanduja, P. B. (2016). Capacity waste management at automotive industry in India: A Six Sigma observation.Dr.Murali kallumal, M. K. (n.d.). wtocentre.Retrieved from https://wtocentre.iift.ac.in/workingpaper/Working%20Paper2.pdfGov.recommendations. (n.d.). Retrieved from https://trai.gov.in/release-publication/recommendationGrowth and development. (n.d.). Retrieved from chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://ijariie.com/AdminUploadPdf/GROWTH_AND_DEVELOPMENT_OF_TELECOM_SECTOR_IN_INDIA_%E2%80%93_AN_OVERVIEW_ijariie3864.pdfhttps://www.investindia.gov.in/sector/telecom. (n.d.).https://www.investindia.gov.in/sector/telecom. (n.d.).https://www.newsx.com/tech-and-auto/indian-telecom-industry-sets-ambitious-targets-for-6g-patents-and-global-standards-contributions/. (n.d.).India legal solutions . (n.d.). Retrieved from https://journal.indianlegalsolution.com/2019/10/15/mergers-and-acquisition-in-telecom-sector-in-india-naman/#:~:text=In%20March%202017%2C%20Idea%20and,final%20nod%20for%20the%20merger.Indian telecom industry. (n.d.). Retrieved from https://www.newsx.com/tech-and-auto/indian-telecom-industry-sets-ambitious-targets-for-6g-patents-and-global-standards-contributions/87
Invest India . (n.d.). Retrieved from https://www.investindia.gov.in/sector/telecomInvest Inida . (n.d.). Retrieved from https://www.investindia.gov.in/sector/telecominvestopedia. (n.d.). Retrieved from https://www.investopedia.com/terms/h/hhi.asp(n.d.). Ircon International.john.b. (2023). Challenges in Market Concentration Measurement. Journal of Market Analysis.lee, T. (2023). Sector-Specific Applications of HHI in Infrastructure. InfrastructureEconomics Journal.Lightreading. (n.d.). Retrieved from https://www.lightreading.com/mobile-core/mts-india-merges-with-rcom(n.d.). Macrotech Developers (Lodha Group).(n.d.). Macrotech Developers (Lodha Group).(n.d.). Nagarjuna Construction.(n.d.). ncc ltd.OECD Employment Outlook 2024. (n.d.). Retrieved from https://www.oecd-ilibrary.org/employment/year-on-year-quarterly-change-in-herfindahl-hirschman-index-hhi-2019-21_f5f7f82e-en(n.d.). PNC Infratech.(n.d.). PNC Infratech.(n.d.). Rail Vikas Nigam Ltd .(n.d.). Rail Vikas Nigam Ltd .startuptalky. (n.d.). Retrieved from https://startuptalky.com/indian-automobile-industry/startuptalky. (2020). Retrieved from https://startuptalky.com/indian-automobile-industry/(n.d.). tata projects.Yu-Shan Chen, K.-C. C. (2009, Jan). Science direct. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S004016250900079188
89