How to make Indian companies 'world class'-Kotak Bank's Uday Kotak, Bajaj Finserv's Sanjiv Bajaj and JSW Group's Sajjan Jindal share this mantra

Uday Kotak, Founder of Kotak Mahindra Bank; Sanjiv Bajaj, Chairman and Managing Director, Bajaj Finserv; and Sajjan Jindal, Chairman, JSW Group shared insights and experiences on various aspects of entrepreneurship and what it takes to create lasting institutions in a panel discussion with CNBC-TV18 Managing Editor Shereen Bhan at the EY Entrepreneur Of The Year on Friday, February 23.

Kotak: I think the India story has to start with leadership. We have amazing leadership at the country level. And under Prime Minister Narendra Modi we are surging forward as a very stable, sustainable country. I think that's extremely important for the sustained growth of a country. And I would say that is the number one point.

In addition to that, I think India has positioned itself beautifully on the global geopolitical scene. We are friends with most countries, but at the same time, we have our interests in every respect. I've never seen the kind of attention and presence India gets on any global table today. Never before. And I think this is a good harbinger of how we can take on global leadership.

Third, India has handled COVID-19 outstandingly and positioned itself in a situation where we have solid macroeconomic stability, a sound improving fisc and a controlled current account. So all the fundamentals for India to take off are in place, and combine this with a much greater focus on building sustainable growth, as distinct from hit-and-run is something I truly believe.

Indian entrepreneurship is for us all to see in this room how wonderfully Indian entrepreneurship is flourishing at this point. Having said that, I do believe that India needs to be like that good batsman and not make bad shots from here, but build a long innings.

Kotak: I'm a great believer in cricket. I love Test cricket. But let's not make it T20—at least a one-day match.

Kotak: I must give credit to the government and to all our policymakers, including the Reserve Bank of India (RBI), for actually navigating the ship through very troubled waters, particularly in the last few years—COVID, oil shock, Russia-Ukraine war—India's macroeconomic stability is phenomenal. We have also cleaned up the balance sheets of banks and financial institutions. I also see a long-term trend of a country of savers becoming a country of investors.

Kotak: I am a believer that financial services is an intermediation game. So, in addition to banks, we are into asset management, broking, reinsurance and everything else. Therefore, we have a holistic view of the future of financial services. We have many things going for us. And we now need to focus on structured capacity building in the financial sector for us to take off and be able to support Sajjan Jindal, N Chandra and many other entrepreneurs and professionals to fuel India's growth and finance India's growth.

Bajaj: It's tough to follow after somebody like Uday Kotak. But let me start by saying that everything Uday has talked about, we've tried to execute. And that's the opportunity that India presents. Even though we've been fortunate to be in a position with a large focus on consumer lending and lending to SMEs, to get to the size that we have, we think we get to work every day, believing, as Bezos said once, it's day one, because there is just so much more opportunity out there.

And to Uday’s point, you have to be sensible; we are eventually in the risk business, and you have to understand how to manage risks. But if you do things sensibly, there is so much opportunity the country offers us and very much like with Kotak, we are now present across lending, insurance, and more recently, asset management. We have digital platforms in health and in each of these, we are seeing tremendous opportunities going ahead. The sky is the limit, as long as you're sensible about it. There will always be cycles, we have to keep in mind, that we are living more and more in a globalised world. Business is not going to grow in only one direction. If you can weather the storms, those businesses will come out as winners.

Bajaj: Clearly, one of the biggest risks is global uncertainty. And if it weren't for that, our economy would have been growing even faster. Unfortunately, there is no visibility to that end. We are talking of not a hard landing in the West, but there is still a landing. Technically, the UK is in a soft recession; we are talking about two significant wars and their impact. India is just getting ready and arming itself with significant exports. Look at what the exports were until six months ago for the last two years. But gradually, those are tempering right now because eventually, those markets have to be able to buy what you're producing. So to me, that is the single biggest risk we have.

Jindal: That's what an entrepreneur is, right? Where you look at the opportunity and then try to grab that opportunity, that is what is important. Today, India is passing through a phase where whatever you want to do, whatever you can do, you will be successful if you do it rightly. And I believe very strongly in that. I believe in this shift from an ICE car to an electric car, or electric mobility, because we have our own electricity in this country and God has given us enough sun, and wind. We can create renewable power. We don't have fuel oil and we have to depend all the time on importing fuel oil. So I think we need to push the pedal to convert our country into an electric mobility country. In the world, probably we should be the first country, besides China, which should be becoming an electric mobility country. And that's why I thought that at JSW we could do it very well, because we have a lot of experience in building large projects very efficiently. So this area is a good, interesting field in a new age.

Jindal: So there was a time when we took a big bet when we were building our first steel plant in the mid-90s. We had a small company, and we were taking up this huge investment because that was the phase when India needed more steel, and therefore we were building that. But today, as a group, we are at a much different stage. And investing ₹40,000 crore is not that big a risk; it's maybe 5% of our total group size, whereas, at that time, it was 300% of the group size, which we took. So if we could sail through that, then this is not an issue.

Kotak: The institution is more important than any individual. As long as you keep that compass in mind and focus on the institution and what's right for the institution, individuals can come and go, but the institution must sustain and grow over a long period of time. You look at the history of some of the biggest successes in the world in the financial sector: JP Morgan. There was a Mr. JP Morgan; once upon a time, he's dead and gone, but the institution JP Morgan has sustained over a long period of time. Therefore, you aspire to create things, that outlive you, and that's the key focus for me as an individual in the context of the institution Kotak Mahindra.

Kotak: I can assure you, I'm enjoying the freedom of being a private citizen for a change rather than being a regulated person. It's great fun, I can assure you.

Bajaj: I can't give you all the ingredients right now, but let me share a few. One, very clearly, is that you have to overmanage compliance and risk. As you get larger, you have no choice because you have tens of millions of customers dependent on you, you have borrowers and you have the regulator. I believe that if you get your compliance, right, that can be a competitive advantage, and that's how we look at it.

Second, in a fast-growing business, we've always looked at our young stars and moved them across business lines, between businesses and functions, almost every 18 months. By giving them greater exposure, for the business guy to understand, after spending time in risk or operations or even an internal audit, they understand how to run a business, and they understand what it takes. So a salesman is not necessarily just a salesman; they also see the opportunity that they have within the company because those that get this greater exposure and do well naturally end up standing first in line when there is a larger opportunity that comes up.

Lastly, what I would say is that you have to keep performing for today, especially those listed companies you're performing for today, for next month or next quarter, but you also have to keep focusing on transforming the business. We are in a very competitive world. The digital world is affecting everybody, especially a few businesses like ours are even more affected, and you have to keep transforming while you're performing.

Jindal: So, there are two points here. One is whether Indian corporations can become global, which means you go outside India and manufacture outside or do business outside India. So I am very much for it. I mean, Indian companies must become multinationals, so that's one part. But the second part is that can Indian corporations become global sites in that particular field? For example, if I'm in steel, can I be one of the leading steel companies in the world?

Jindal: I don't know; I don't want to say that. But can I be a global leader in steel? Can there be a company that is in aluminium, that is a global leader in the world, the largest in the world? Can we have 10–20 companies becoming global leaders from India and producing in India? This is something we need to do as a country, and I'm sure we can do that. We just need to put our minds together to become global leaders.

Jindal: Thought process. We just have to think that we want to be a global leader. We have a very big market, one of the largest market, growing market, so we have to think big and think globally. And we have to think that we have to be number one in the world out of India.

Kotak: I think it will require a very significant institutionalisation process of corporate India. There are groups and companies which are moving in that direction, but it would require a completely different mindset to get to that scale.

And second is innovation. You just need to look at what happened yesterday in the US in one day: the stock price movement in Nvidia is larger than the largest company's total market cap in India. For us to get scale, if I've really got to think about one country, that does it better than anybody else, it's the United States. You build something that flourishes entrepreneurship and creativity and combines it with process and professionalism. That's how you build scale and size and sustainably, not hit and run.

Bajaj: The single most important thing is to get out of bed every morning, knowing you can make a difference and you can conquer the world. And even if you fail that evening, run your business ethically so you can go to sleep peacefully, waking up again the next morning believing the same thing.

Jindal: For any son or daughter, the best advice comes from father and mother. So my dad always used to say that you will go through ups and downs in business, and nobody can stop that. But if you just stay focused and do it with honesty and hard work, you will be successful. So that was his advice and I've always followed that. I've always stayed very focused on my task, with commitment, and honesty and that's what has given me success.

Jindal: Absolutely.

Jindal: By when—it's very difficult, but maybe in the next 5-10 years.

Kotak: After the global financial crisis, I was at the World Economic Forum on a stage, and Fareed Zakaria asked me a question: What do you think the bank of the future should look like? And this is what I said, then, and I believe: the bank of the future must have, or a banker of the future, or any entrepreneur of the future must have three human qualities. The first is simplicity. Do simple stuff, don't complicate it. Second, prudence: don't do creative derivatives and stuff like that. And third, and the most important, is humility. You're not the master of the universe; you're there to serve customers, employees and citizens of your country. That's the advice I would like to follow for myself and for all Indians.