Monday, April 29, 2013

India Faces Reality Check In Latest Global 2000

India, a nation that has earned a reputation for churning out some of the wealthiest billionaires in Asia, if not on the planet, has curiously enough, never produced a candidate in the top 100 ranks of the annual Global 2000 list of biggest publicly-traded companies.


This is in contrast to China, a country India loves to compare itself to, which this year came out on top with its state banks, ICBC and China Construction Bank ranked at Number 1 and 2 for the first time. By comparison, the Indian presence this year is more muted; the total number of Indian companies fell from 61 in 2012 to 56 this year.

This perhaps could have been expected in light of a slowing economy bedeviled by scams and a meek government that hasn’t yet demonstrated its commitment to deeper economic reforms.

Half a dozen companies on last year’s list didn’t make the cut this year, including Reliance Communications owned by billionaire Anil Ambani, JSW Steel , part of the Jindal family, also among India’s wealthiest and hydropower heavyweight Jaiprakash Associates.

The three highlighted have something in common: they’re struggling under a mountain of debt that was taken on during rosier times.

A look at the returnees indicates that Indian business may have hit a plateau: two thirds of the 55 returnees to the list have dropped in the rankings.

The notable exceptions are generic drugs champ Sun Pharmaceutical Industries, founded by billionaire Dilip Shanghvi and billionaire Shiv Nadar’s outsourcer HCL Technologies.

Both have registered ranking gains in the triple digits. Sun has had an incredible run in the stock market in the past year, propelling Shanghvi to the top 5 ranks of India’s richest. Nadar’s HCL has been gaining business at a time when bigger rivals have reported slower growth.

The government it seems, continues to play a big role in business, notably in banking where it dominates. There are 31 state-owned Global 2000 firms versus 25 from the private sector.

The bulk of the latter are linked to billionaire families. It’s a mixed year for Ambani; while his telecom outfit has dropped off, Reliance Infrastructure which has a presence in power generation and transmission, roads and metro rail, is the sole newcomer in 2013.

Big brother Mukesh Ambani’s Reliance Industries is India’s biggest company, ranked at Number 121.

forbes.com

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