It is hard to believe that many of the biggest corporations in India today were relatively small firms a couple of decades ago. In 1992, for instance, Infosys had a turnover less than Rs 10 crore. It is today a Rs 27,501-crore company. In 1990, Sunil Mittal's Bharti Airtel, which had a turnover of Rs 39,615 crore last year, was still to be formally incorporated — it was making fax machines and fixed line handsets. Even companies that were reasonably big by the standards of the 1990s were less than a fourth of the size they are today. Tata Steel was a mere Rs 2,066-crore company in 1990 (currently Rs 1,04,269 crore), and Reliance Industries boasted a turnover of all of Rs 1,844 crore (today Rs 2,58,651 crore).
Business journalists and analysts love to use the phrase "scorching rate of growth". But what is a scorching rate of growth? In the 1990s, Infosys had a growth rate of well over 60 per cent year-on-year. Even after it slowed down in the 2000s, it grew at over 25 per cent year-on-year. Many companies that were set up around the same time are still small firms today.
Tomorrow's giants are today's mid-sized or small companies, which are growing rapidly and consistently. Therefore, in this special issue anchored by executive editor Rajeev Dubey, and reported by correspondents Shrutika Verma and Abhinav Sharma, we decided to check out the companies that have been showing consistent growth over the past six years or so. We looked at over 5,000 companies whose data was with the Centre for Monitoring Indian Economy. We divided the universe of companies into four size classes — turnover of Rs 5,000 crore and above, between Rs 1,000 crore and Rs 4,999 crore, between Rs 500 crore and Rs 999 crore, and finally, the companies smaller than Rs 500 crore in turnover.
We looked for consistency of growth and the results surprised us. Not the least because we found that there were many big companies that have been growing at over 25 per cent a year for a long period. Just below that, it was not uncommon to find a couple of companies clocking over 150 per cent growth year-on-year for five years. If even a quarter of the companies in our list can maintain their growth momentum, expect them to be tomorrow's biggest corporate names.
(This story was published in Businessworld Issue Dated 23-05-2011)