Dr Mark Mobius (sometimes called the Indiana Jones of the investment world, as the pioneer of investing in emerging markets) is Executive Chairman, Templeton Asset Management Ltd, and here he shares notes from his recent travels through six fascinating cities of India: Mumbai, Delhi, Pune, Goa, Chennai and Kochi.

After a stay in China we took the six hour flight from Shanghai to Mumbai in search of investment bargains. The schedule in India included six fascinating cities: Mumbai, Delhi, Pune, Goa, Chennai and then Kochi.

Upon landing at the Mumbai Airport I wasn’t surprised by the chaos because I’ve experienced it a number of times. India is a good example of where the private sector is moving ahead, despite the government bureaucracy and poor infrastructure.

Riding on the potholed roads and running the gamut of government approvals sometimes makes businessmen lose faith in the “world’s largest democracy”, in favour of the more effective Chinese “benevolent dictatorship”.  But there are obvious strengths to the Indian diversity.

Mumbai
One of the first companies we visited in Mumbai was a mobile phone company. The company faces lots of uncertainty regarding the radio frequency spectrum issued by the government. One executive said: “Most of the mobile phone companies have been applying for spectrum for over a year and the government has taken no action.” That lack of frequency spectrum has meant a lot of network quality issues, such as dropped calls, which we were experiencing on the trip. Nevertheless, the number of cell phone subscribers is increasing rapidly and is currently over 150 million. Most industry experts think that India will touch 500 million subscribers by 2010.

I’ve been to Mumbai many times, first visiting when it was known as “Bombay”. Many, if not all of India’s major cities have been renamed to reflect their Indian origin. “Mumbai” is apparently derived from the Hindu goddess Mumbadevi. The old colonial name was supposed to have originated by 16th century Portuguese merchants who probably considered the deep harbour a “good bay” or “bom bahia” and then British anglicised it to “Bombay”. It’s amazing to think that the islands that make up Mumbai were taken by the Portuguese in 1534 and then given to Charles II of England in 1661 as a dowry (in addition to Tangier City, in what is now Morocco) for his marriage to the Portuguese Princess, Catherine de Braganza.

Mumbai was then leased to the British East India Company in 1668 for the princely sum of £10 per annum. It’s worth a lot more now! As the capital of the Indian state of Maharashtra and with an estimated population of about 17 million, it is the largest city in India and also one of the world’s most populated cities, something easy to see when younegotiate the traffic snarl.

The good news is that instead of having to go to the clogged heart of the city there are great new hotels such as the Hyatt on the outskirts. New offices have been built there and our office has moved to that area. We do a lot of business in Mumbai, since that’s where India’s two stock exchanges are located and it’s the headquarters of many major companies.

Delhi
Arrival in Delhi, India’s second largest city, was more pleasant with a cleaner, brighter and more efficient terminal. This was the result of privatisation. What has always been interesting for me is the architecture of “New” Delhi, created when the British colonial government moved the capital from Calcutta to Delhi at the turn of the 20th century. It is quite an experience to view the expansive imperial red stone buildings, featuring traditional Indian elements with domes and spires laid out in wide boulevards by the colonial British architect Edwin Lutyens.

In Delhi, the roads had improved since my last visit and the hotels were full and expensive. The main reason for visiting Delhi was to reach the industrial area of Gurgaon, home to a number of major motorcycle and automobile plants, including a massive car facility that we visited. Gurgaon is one of Delhi's four major satellite cities and is therefore considered to be a part of the National Capital Region of India.

The Gurgaon area is known for its activist workers, but the managers at the company we visited seemed to have handled the labour situation well. Security is tough, with workers searched as they leave the factory. As we entered, the security guards actually took down the registration numbers of the laptops we carried into the facility. When we left they checked to confirm that what we brought in was being brought out.

Automation in the plant is high and the planned capital expenditure program is US$2 billion over the next 2 years. Thousands of automobiles roll off the production line each day.

Pune
After the plant visits we left for Delhi Airport to take off for Pune. Pune is another major city and is considered the “Oxford of India” with its many colleges and schools. It’s also strong in vehicle production, with some of the country’s largest automobile manufacturers based here, along with various support industries, including one of the world’s largest forge manufacturers. The firm makes items such as crankshafts, chassis components, axles, automobile and truck transmissions. Their factory is one of the most advanced in the world, with the high tech iron and steel machining equipment.

Goa
After Pune, we travelled to Goa. I found the place delightful with its quaint Portuguese influence, garnered over its position as a Portuguese colony for about 450 years. The famous explorer Vasco da Gama came here in 1498 and made it a major base for the spice trade and the propagation of Christianity. It was only when the Indian army overcame the Portuguese garrison in 1961 that the Portuguese left. Goa has been transformed from a haven for hippies to an up-scale luxury resort destination.

Although tourism is a mainstay of Goa’s economy, it is also a mining centre, with rich deposits of iron ore, bauxite, manganese and silica etc. We visited a large iron ore mine, a one and a half hour drive from our Goa hotel. The entrepreneur who took control of this company from the government started out as a scrap metal trader in the late 1980s. He is now the chairman of a multi-billion mining group involved in aluminium, coal, electric power and other businesses. The company has a 50 year history and in addition to their Goa mines they are mining for iron ore in Orissa and Karnataka states. The iron ore operations do not only include digging the raw materials out of the open cast mines but also beneficiation processes, to separate oil from the earth materials.

Chennai
From Goa we flew to India’s fourth largest city, the capital of Tamil Nadu State, Chennai, formerly Madras, in the Bay of Bengal. I was surprised to learn that the Tamil language almost became the national language and there were violent agitations in 1965 against the imposition of Hindi as the national language. I was here in Chennai for many years while working for the UNDP at the CLRI (Central Leather Research Institute) many years ago.

There’s a lot of information technology activity in Chennai and one of the largest firms that we visited has 14,000 employees in their Chennai facility, out of a worldwide total of 100,000. Ten percent of their staff is outside India, spread over 57 countries including US, UK, Belgium, Luxembourg, Netherlands, Sweden, Norway, Finland, South Africa, Brazil, Argentina, Uruguay and other countries. Turnover is 11% at the firm, but in the industry it is 15%, so personnel recruitment is a continuous battle. The company is recruiting 35,000 people this year, 80% of which are engineers, with the rest accountants and business school graduates.

The city is booming with construction taking place everywhere. One interesting example of their global project reach is a US$97 million Bank of China financial accounting project. The appreciation of the Indian rupee has impacted their profit margins, since most of their costs are in rupees, while their projects are based on US dollar. Chennai was one of the centres that the firm had started developing 25 years back. Now the Chennai operation has nearly 25,000 employees on the payroll, with seating in their large modern building for around 17,800, with the rest at client locations overseas. They are now building a new campus and by the end of 2009, expect it to accommodate 40,000.

Kochi
After Chennai on the east coast, we flew west again to Kochi (formerly known as Cochin), the capital of Kerala State. Historically the city was a centre of the spice trade so its shores over the centuries saw Greeks, Romans, Jews, Arabs and the Chinese. As we were leaving Kochi we noticed long queues of men at the airport passport control. They were leaving for the Gulf. Kerala seems to be a major source of manpower for Dubai, Abu Dhabi and other countries in the Gulf region. Our next stop was Dubai so we’ll probably be seeing the impact these men have on that region.