Will Indian conglomerates also go the General Electric way?

Conglomerates, and the demerits of being one, are once again in the news. This month, General Electric broke up into three public companies. Experts suggest the development was long overdue. General Electric’s revenue for 2020 was $79.62 billion, a far cry from the $180 billion-plus revenue it booked in 2008. In India too, Vedanta took a similar call of restructuring.

Market imperatives obviously drive such decisions. Which is why conglomerates have come to be regarded as dinosaurs in the western world, a relic of a bygone business climate that favoured such company structures. Diversification into multiple businesses was once considered to be an effective way to mitigate risk.