Multi-national corporations & MNC¶S

foreign Collaborations

A multinational corporation (MNC) is a corporation or an enterprise that manages production or delivers services in more than one country.

Types of MNC·s € Horizontally integrated multinational corporations Vertically integrated multinational corporations Diversified multinational corporations € € .


What is FOREIGN DIRECT INVESTMENT FDI occurs with the purchase of ³physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control.´ .

etc. investing. International institutional investors must register with the Securities and Exchange Board of India to participate in the market. ‡ The term is used most commonly in India to refer to outside companies investing in the financial markets of India. India. Institutional investors include insurance companies.‡ An investor or investment fund that is registered in a country outside of the one in which it is currently investing. . market. pension funds and mutual funds etc.

‡ Joint participation of foreign and domestic. venture or a project. ‡ ‡ There are three kinds ± ‡ Joint participation between private parties ‡ between foreign firms and Indian government ‡ between foreign government government and Indian .Foreign collaboration Collaboration meaning.working jointly on an activity.

.Two types of foreign collaborations  Financial collaboration (foreign equity participation) where foreign equity alone is involved  Technical collaboration (technology transfer) involving licensing of technology by the foreign collaborator on due compensation.

TRENDS IN INDIAN INDUSTRIES Investing in India Automatic Route Prior permission (FIPB) GENERAL RULE No prior permission required only information to the RBI within 30 days of inflow/ issue of shares BY EXCEPTION Prior government approval needed Decision generally within 4-6 weeks .

It is the medium that channelizes the small savings of the community and make it available for industrial outlets. . Capital Market is the market for long term finance.

Primary market    It is also known as new issue market Conversion of savings into corporate investment Raising of financial resources from the investors by issuing them new and fresh securities .

debentures and bonds.Secondary market    It is a market for all those securities and stock which are already issued to the public It is also called as stock market It deals with securities like shares. etc issued by different companies .

Importance of capital market         Mobilization of savings Channelization of savings for productive purposes Encouragement of savings It facilitates industrial development It provides wide avenue for investment It increases production and productivity It facilitates technological up gradation It facilitates over all economic growth of the company .

Functions of capital market     Motivates individual to save and invest Safe and productive channel for investment Liquidity to the savings Mobilizes savings of large number of individuals .

Role of SEBI in Indian capital market   It is an apex body to develop and regulate stock exchange in India It was setup on April 12. Initially SEBI was a non statuary body but in 1992 SEBI got the statuary power. . 1988.


Segments of the capital market      Investors Capital seekers Regulatory bodies The stock exchange The registered intermediaries .

Following are the reasons why multinational companies consider India as a preferred destination for business:     Huge market potential of the country FDI attractiveness Labor competitiveness Macro-economic stability .

Advantages of MNC's in India     Increase in job opportunities Better and cheaper products will be available to the consumers The government will also benefit by earning more in taxes etc It will lead to an increase in infrastructure improvement .

MNC¶s generally import huge raw materials due to its continuous use by these overseas companies.Disadvantages of MNC·s in India  MNC¶s create monopolies in the market and eliminate local competitors.    . MNC¶s may create depletion of resources due to its continues use by these overseas companies. MNC¶s generally carry out their R&D in their home country and supply to the host country.

By:Team-6 .

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