Where Do India’s Large Corporate Groups Locate Their Plants?

The data on plants owned by the BSE1000 manufacturing companies shows where India’s biggest conglomerates and corporate groups have their manufacturing capacity. Many of these groups are global companies, with plants and offices across the globe, but they have a strong bias towards their home state. Both Adani and Nirma, for instance, have the most number of plants in their home state of Gujarat, as does the Murugappa Group in Tamil Nadu.  

The other preference is towards more developed states. Apart from Tamil Nadu, Murugappa group has 23 plants in Gujarat and Maharashtra. Outside Gujarat, Nirma has 16 plants in Maharashtra and Tamil Nadu. The exception is typically sectors such as mining and power where plants have to be close to fuel supply sources such as coal. Thus, relatively poorer but mineral-rich states such as Jharkhand punch above their weight in location of industrial plants—but these typically tend to be power plants.

Interestingly, even the location of manufacturing plants of listed central government PSUs tends to be biased towards more developed states.  

PSUs have historically been faced with two opposing pressures—the pressure to fall in line with broader developmental objectives and locate plants in poorer and more remote areas. However, the need to locate plants close to sources of skilled manpower or key inputs has also pulled them in the other direction. But it’s clear, at least in the current scenario, and excluding PSUs in specific sectors such as power or coal, the second pressure has won.  

Karnataka has no less than 32 manufacturing plants of listed PSUs (in the BSE 1000 universe), followed by Maharashtra (25 plants).

Together, they account for over 30% of the total manufacturing plants of large listed PSUs across the country.