BT 500: India's Most Valuable Companies

     Print Edition: Nov 10, 2013
BT 500: India's Most Valuable Companies

When Tata Consultancy Services (TCS) dethroned Reliance Industries (RIL) as India's most valuable company in our annual BT 500 ranking last year - ending RIL's nineyear reign as No. 1 - it was expected that the two would have close contests for the next few years. The difference in their average market capitalisation then was just Rs 1,625 crore. (Our ranking is decided on the basis of average market capitalisation for the first half of each year.) But what has happened since is surprising. TCS has surged ahead of RIL in this year's comparison, the gap between them widening to Rs 51,642 crore. Our lead story Bigger than Before looks at what contributed to TCS's strong show.

The ranking this year has thrown up other surprises. In a difficult year, almost all FMCG companies, for instance, have shown a rise in the ranking. We tell the FMCG story through Godrej Consumer Products, which has stormed into the Top 50 of the ranking (see Ministering to the Masses.) Again, Tech Mahindra has been growing in recent times - its ranking rising sharply to 64 this year after the merger with Mahindra Satyam - and hopes to catch up with its bigger Indian peers soon. We look at its strategy (see The Big League Beckons). There are also seven new entrants in the ranking this year, but among them, Just Dial's debut has been the most spectacular.

We have sobering reports too. Close to 75 per cent of the central PSUs in the BT 500 list have fallen in the ranking. Poor Show Undertakings looks at what went wrong. Digitisation has unlocked a lot of value for cable companies such as Hathway and Siti Cable whose market cap has risen sharply. We look at what triggered investor interest in these and the challenges they still face.

Through the chart we have mapped companies that have occupied the top 10 BT 500 ranks over the years. It shows how some once-dominant players have disappeared from this hallowed list to be replaced by new stars. In the chart alongside, we look at how different sectors have fared over the years. It can be seen that the structure of the BT 500 rankings has undergone a significant change since 1993 when this exercise began. The FMCG sector, for instance, which was the largest in terms of market capitalisation then with a share of 17 per cent and 23 per cent a decade later, now has just eight per cent share. Similarly the share of core sectors such as cement and steel has also shrunk from five per cent each in 1993 to two per cent this year. Indeed, sectors such as metals and minerals (other than steel), power, machinery, chemicals and hospitality which together, in the early 1990s comprised more than half the total market capitalisation of BT 500 companies, today account for 38 per cent.

In contrast, some other sectors have gained too. Banking services, with a market capitalisation of two per cent in 1993, has 12 per cent this year. Along with oil and gas, it forms the largest sector in the ranking. Oil and gas had a four per cent presence on 1993. The software sector, tiny in 1993 with a one per cent share of market cap, has grown to command 11 per cent share in 2013. The change mirrors the transformation in the economy in the last 20 years.

N. Madhavan
Research by Jyotindra Dubey & Niti Kiran

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