Indian Oil Corporation has claimed the top spot in the Businessworld Real 500 ranking, while the State Bank of India has been rated No 1 among the Top 50 financial companies in the country. The Businessworld Real 500 list will appear in the Businessworld issue dated October 7 (it will hit the stands on September 30).
The Businessworld Real 500, the magazine claims, is "the most rigorous listing of India's biggest companies". According to the magazine, "The Businessworld Real 500 ranking of the Top 500 companies in the country is based on the average of their assets and sales combined. That makes it far more comprehensive and accurate than other lists that depend on either market capitalisation or only sales, for working out the rankings. Market capitalisation is a poor parameter for compiling a list of big companies because it ignores all companies that are not listed in the stock market."
To elucidate the point, Businessworld cites the following example. A list based on market capitalisation would ignore a Tata Sons (No 48 in the BW Real 500) or a Hyundai Motors (No 77) simply because they are not listed companies. Similarly, a ranking based only on sales would end up leaving out all the big telecom companies that have sunk huge sums of money into building assets, but have comparatively low sales because they have started operations only recently. On the other hand, a listing by assets would leave out software giants like Infosys because it has comparatively smaller physical assets. "By taking both sales as well as asset base into account, the BW Real 500 has taken both the profit and loss account as well as the balance sheet of a company to gauge its true size," says a company release.
The BW Real 500 has come up with a number of surprising findings.
• More than a quarter of the companies (142 in total) in the top 500 are unlisted;
• 104 companies in the top 500 were born in the nineties;
• Another 102 were incorporated in the eighties. As one goes back in decades, the number of companies in the top 500 keeps falling;
• Bombay Dyeing (No 154) is the oldest company in the list. It was incorporated in 1879;
• Public sector companies account for 51 per cent of the sales and 49 per cent of the assets of the Top 500;
• More than a fifth of the companies (115) in the Top 500 saw their revenues shrink last year, while 93 saw a fall in assets.
Interestingly, National Thermal Power Corporation is the sole non-oil company in the Top 5. Reliance is the number one private sector company in the list. Satyam Computers, Sterlite Optical Technologies, Bilag Industries, Infosys Technologies and GTL were the Top 5 value creators among the Top 500 (ranked by return on assets). Usha Ispat, IFB Industries, Koshika Telecom, Bharat Coking Coal and JCT were the five biggest value destroyers in the list. Â© 2002 agencyfaqs!