In the last two decades, across the globe, growth has come down by 50% and volatility has gone up by 50%. But the unique feature is that valuation has gone up by 50%. This phenomena is unique, as companies registering negative profit are more valuable today, than the companies that pay good dividend, this paints a picture of uncertainty and management students have to brace to handle the uncertainties, said Manish Goyal, Vice- President of Bain and Company and Chief Operating Officer of Bain Capability Network.
He was delivering a talk at the inaugural function of the 8th batch of the Post Graduate Programme in Management (MBA), 4th batch of Ph.D. Program and 4th batch of Post-Graduate Program in Management for Experienced Professionals (MBA), at IIM-Visakhapatnam, here on Saturday.
He explained that the reason for this situation was that financial capital has become abundant and is cheaper. “There is too much money in the world and much of the money is being pumped into the financial capital sector rather than in infrastructure, which is leading to an inflation-like situation. Investment is more in capital consumptive firms and it is less in companies that give good dividends and the COVID-19 pandemic has accelerated this investment,” he said.
Because of this, global debt has reached an all time high of 300 trillion USD, the highest since World War II, giving rise to inflation and this is the prime reason for the economic scenario in countries such as Sri Lanka, Argentina and Turkey, he said.
He urged the students to not only prepare themselves for the situation, but also advised them to chase their goals rather than look for placements.
New campus
Earlier, addressing the students, Director of IIM-V M. Chandrasekhar said that the new campus will be ready shortly and this would be the first batch that would operate from the campus.
IIM-V is currently operating from a building in Andhra University and will be shortly moving to its new campus that is coming up at Gambheeram.
He also said that the campus has achieved net zero status in energy and water conservation and carbon footprint.
He urged students to be professionally responsible and at the same time be socially committed. He said that the courses at IIM-V are in sync with the industry and societal development.
Full-fledged incubator
Dr. Chandrasekhar also said that the institute has a full-fledged incubator, which trains, tests and funds upcoming entrepreneurs.
“It is the only IIM that has a board approved policy to encourage startups. From our budget we set aside 1% for funding startups,” he said.
Senior professors from IIM-V Milan Kumar, M.V. Anuradha, B. Srirangacharyulu and Saroj Kumar Pani, spoke.
The intake for the year 2022-23 is 294 students for the PGP in Management, 17 students from PGPEx and 2 scholars in the PhD programme.
