For the first time in India’s history, a majority of the promoters and executive directors of Nifty50 companies are neither foreign educated nor educated at the elite IITs & IIMs, says a research by Marcellus Investment Managers.
Instead, a majority of the people running Nifty50 companies now have ‘normal’ Indian degrees.
Symptomatic of this transformation is HDFC Bank, India’s second largest listed company by market cap. All the Executive Directors on the Board of the bank are graduates of Mumbai University and the rise of such executives is now the norm in India, Nandita Rajhansa and Saurabh Mukherjea of Marcellus Investment Managers said.
“The old conglomerates run by elite families — whose core strengths were anglicized ways and political connectivity — are steadily fading away,” it said.
The fading away of an old, established elite — the inheritors of the British Raj so to speak — has taken place over the past four decades. In its place has emerged a new elite which hails from more modest economic backgrounds, speaks English with a vernacular accent, is at ease with using technology and is confident of its ability to manage diverse pools of talent, the research said.
As new entrepreneurs from smaller towns — particularly those with a strong grip on how modern tech works — are pushing the entrenched elites of the big cities out of the way, the report said.
“We are seeing rapid changes in India’s Boardrooms. No longer are people with crisp English, membership of the right clubs and degrees from prestigious universities assured a place at the apex of India’s economic pyramid. The new elite are those with a strong grip on vernacular languages, a practical understanding of how small-town India functions”, it said.
A combination of these factors (networking, India stack, drop in cost of capital) has unleashed long pent-up entrepreneurial energy not just in the tech and startup space (resulting in the creation of 68 Unicorns) which were primarily financed by foreign PE & VC capital but also in conventional businesses (i.e., businesses whose founders were either part of the old elite or the technocrats who got educated at premier institutions in the country, and were primarily financed by the Indian stock market).