Stephen Jennings, chief executive officer of the Renaissance Group, a leading investment bank in Russia/CIS and sub-Saharan Africa, sees explosive growth opportunities for Indian companies in Africa in sectors such as telecom and financial services.
"Some financial service models that you have in India are very cost-efficient - these are much more relevant than a Citibank model. And then, there are retail and consumer goods sectors."
Jennings is walking the talk and recently tied up with Kotak Investment Banking for cross-border mergers and acquisitions' advisories between the emerging markets in which they operate.
Indian companies have been listening. A host of them, including the Tata Group, Mahindra &; Mahindra, Marico, Emami, Godrej and the Essar Group, have entered the vast continent by buying companies or setting up manufacturing facilities.
The reasons are many. About 890 million people live in 54 countries in Africa and that's a huge potential market. Also, growth is picking up.
There are other advantages as well. The African telecom market, for example, is exactly at the same stage where the Indian market was five or six years ago in terms of penetration, rates and so on.
The mobile penetration rate, only 30 per cent now, is forecast to touch 70 per cent in three to four years. That will happen through competition in a continent where the fixed-line market was a monopoly and the mobile market a duopoly till as recently as 2007.
Though the Indian market saw competition much before, the similarities are unmistakable. The telephone penetration rates, for example, range from 14 per cent in Congo to 123 per cent in Gabon, though most are in the low double-digits.
Essar, for example, wants to be a substantial pan-Africa player and Kenya, where its YU brand was launched a year earlier, is just the first step in that journey.
But, many analysts say, Essar and other Indian telecom companies are in for a long haul in a market where three of the four operators have a combined market share of just 20 per cent.
Safaricom has an overwhelming leadership with 80 per cent market share, earning around 60 per cent of the telecom revenue in the continent.
It's not telecom companies alone. NIIT, for example, began its operations in Africa in 1997.
The early-mover advantage paid off, as the company now has established centres in eight African countries and has trained nearly 150,000 students.
Other companies have tapped this opportunity well, such as fast moving consumer goods major, Marico, focusing on niche segments like anti-lice shampoo segment and oil for ethnic hair in only some African nations. Marico has acquired, among other things, hair-care brand Fiancée in Egypt.
Last week, Godrej Consumer Products bought Tura, a household brand in Africa, for over two decades.
Tura has been a household brand for over two decades in Africa, whose products like soaps, moisturising lotions and skin-toning creams are sold widely.
For Godrej, which has a relatively stronger presence in South Africa, Tura will strengthen its presence in the African continent and also prove to be a solid base for introducing its own products in West African countries.
Although fruits from this acquisition may take some time to bear, the African continent provides a huge long-term growth opportunity for GCPL.
While analysts say GCPL's Rapidol and Kinky brands (which currently contribute about 10 per cent to consolidated sales) are growing at more than 40 per cent, Nigeria itself is an important personal-product market, with a population of over 140 million and an annual economic growth rate of 6 per cent.
That apart, penetration levels are also low in Africa.
The opportunities are huge for pharma companies, too. South Africa, for instance, is rolling out a $500-million plan to provide antiretroviral treatment to everyone afflicted with HIV, which means the market is for the asking for companies like Dr Reddy's Labs, Cipla, Ranbaxy and Aurobindo Pharma.
But, analysts caution, Africa is a difficult market as well. The main challenge is the diversity.
The north of Africa is very different from the west, which is different from the central, which is different from the south in terms of natural resources, political stability, and economic stability.
So, there is no place for a one-size-fits-all strategy.
Jennings says the main challenge is that Africa has dozens of countries and the way you do business in each will vary -- the way you treat people, the due diligence involved, the structuring question and political questions.
