INDIA (DOMESTIC FIRMS): An Introduction to Corporate/Commercial: Hyderabad
How many headlines does it take to leave a mark and build a reputation? In the case of the city of Hyderabad (the capital of Telangana, India’s youngest state), it has taken just four – all in a matter of a year. Already a city known for its royal lineage, food, culture and heritage, it has now earned the reputation of being a prominent business hub and the destination of choice for several global companies.
The dedicated focus and vision of the people coupled with the might of regulatory policy has been instrumental in propelling Hyderabad towards being a key player in the India growth story. This journey can be captured in four headlines released this year – each a building block to creating the “Hyderabad Story”.
The IT Destination
In September 2023, several publications printed that “Hyderabad races to top as IT destination for GCCs in India”. Global capability centres (GCCs) are units of companies located across the world and are responsible for providing various kinds of support services to the main organisation, including such as IT/Information Technology enabled Services (ITeS), finance, HR, and analytics.
The role of GCCs has grown more meaningful and they are now the source of innovation as opposed to providing back office support. Interestingly, Bangalore (an established player in this space) had the same number of GCCs as Hyderabad – a total of 11 each, with Hyderabad ahead of the curve when it comes to expansion of GCCs in the city. These details emerged from the report issued by Nasscom and Zinnov in 2023. According to this report, in the first half of 2023, 18 new GCCs were set up – with seven being set up in Hyderabad alone. Of these, four are in the IT/ITeS space, one in the medical devices sector, one in the fast-moving consumer goods (FMCG) sector, and one in the banking, financial services and insurances= (BFSI) sector.
The new GCCs in Hyderabad are well-known organisations such as BlackBerry, CyberArk, Storable, Align Technology, Mondee Holdings, Lloyds Banking Group and Inspire Brands; the ones that expanded include Omni Design, Bristol Myers Squibb, London Stock Exchange and TechnipFMC. In the emerging aerospace and defence sector, Hyderabad houses about 18–20% of the GCCs and is placed among the top three in India. GCCs spell innovation, creativity, and development. For businesses, this acceleration in growth has made Hyderabad synonymous with these qualities as well.
The Land of Plenty
This brings us to the next headline, which read: “Telangana nets INR3,300 crore via auction of 45 acres in Hyderabad.” As is evident from the headline, Hyderabad as a city continues to attract the attention of real-estate developers. The HMDA (Hyderabad Metropolitan Development Authority) has collected about INR3,300 crore by auctioning 45 acres of land at Kokapet, whose neighbourhood boasts of some of the top multinational companies. In one of the plots, the HMDA saw bidders quoting for the highest amount of INR100 crore an acre. The average bid price was INR73 crore. These numbers are relatively unheard of in most cities and to say that it captured the imagination of most in Hyderabad is an understatement. The city borders are expanding every year, creating valuable pockets of land with each growth cycle. A newspaper article also stated that Hyderabad recorded 26% in year-on-year growth in property registrations in July 2023. The surge in land prices and the growth in the real estate sector in Hyderabad has truly been phenomenal and says a lot about its prospects going forwards.
Where to Find AI?
The next headline spoke about the buzzword worldwide – AI. The headline read: “Telangana poised to be a global leader in AI.” Through various initiatives, such as Telangana AI Mission (T-AIM), Research and Innovation Circle of Hyderabad (RICH), and High-Performance Computing Facilities, the Indian government is making an effort to increase the adoption of AI – not just in governance but also among industry.
To achieve this, the state has charged the Emerging Technologies (ET) wing of the IT, Electronics and Communications Department to drive initiatives across multiple emerging technologies such as AI, blockchain, cloud, IoT, drones and robotics, augmented and virtual reality, SpaceTech, and additive manufacturing. To ensure that it is in the driving seat when it comes to AI, Telangana published an actionable policy framework for AI in June 2020. Subsequently, the ET wing partnered with several reputable organisations from the industry and academia, including Intel, NVIDIA, the World Economic Forum (WEF), IIT Kharagpur and Public Health Foundation of India (PHFI), among others. It is interesting to note that AI has certainly been a focus for Hyderabad for a few years now, with initiatives such as the following.
- Telangana was a pioneer among the states in introducing open datasets in machine readable formats published in the State’s Open Data Portal (Open Data Telangana). IIIT Hyderabad’s Indian Driving Dataset (IDD) was one of the only training datasets related to mobility data on vehicular movement on Indian roads, which is being used by global firms.
- Hyderabad’s contribution to IT/ITeS sector played a vital role in putting India on the global map. The overall number of people employed in Telangana’s IT/ITeS sector, according to the IT, Electronics and Communications Department, is more than 900,000. In 2022–23, job creation has been growing around 16.3% per annum.
- Telangana has 51 incubators and accelerators, with specific focus on various sectors (such as life sciences, fintech, agritech and digital).
- Telangana has a total of 6,873 registered start-ups. Of these, 211 (3% of total start-ups) are machine learning/AI-based start-ups.
In addition to this, start-ups in Hyderabad across all sectors have consistently been innovative and attracted attention from domestic and foreign players. As of August 2022, there are 11 AI start-ups from Telangana that have struck deals of more than USD1.2 million, around three start-ups with deal size between USD0.6 and 1.2 million, and six start-ups with deal size between USD0.3 and 0.6 million.
India in Pharma Land
Another ambitious project in Hyderabad is the Pharma City Project, which led to the headline “500 companies evince interest in Hyderabad Pharma City”. Hyderabad's pharmaceutical and biotechnology sectors continue to be examples of economic growth, contributing one-third of the global vaccine output, and the city accounts for more than 35% of India’s pharmaceutical production. It is home to several pharma and biotech companies, with a combined valuation of more than USD50 billion.
In the last year, GV Safety Assessment Platform (GVSAP), VIMTA Labs, Rx Propellant, Roche Pharma and Bristol Myers Squibb have either planned to invest or have set up new facilities or development centres in Hyderabad. It goes without saying that Genome Valley and the upcoming Pharma City underline the government’s commitment to advancing R&D and manufacturing in this sector.
The Pharma City that is currently being planned is spread across 19,000 acres and will be the largest in Asia. It will constitute a smart ecosystem, creating a new international benchmark for sustainable industrial cities. It is built to have plug and play infrastructure and is designed to be the launchpad for companies manufacturing bulk drugs, synthetic drugs, large volume of chemical synthesis, intermediates, vitamins, vaccines, drug formulations, nutraceuticals, herbal medicine products, specialty chemicals and cosmetics. With these facilities under one roof and with the promising blueprint of the Pharma City, Hyderabad is sure to see tremendous growth in this sector.
Looking Forward
It is a challenge to summarise the growth story of Hyderabad in just four headlines, yet necessary to give it the attention it deserves. It is evident that much can be expected from Hyderabad in the next few years – the new change in guard after recently concluded elections will spell more prospects for the state. Hyderabad is at that critical juncture where every decision that its leaders – be they captains of industry, entrepreneurs, policymakers, educators, or professionals – make will shape its future in a meaningful way. Hyderabad as a city must completely absorb the words of Winston Churchill: “Difficulties mastered are opportunities won.” The authors are excited to be part of this journey.