Listing Wealth

The axiom — all wealth is the product of labour —  forms the basis of this study. Every year, BW | Businessworld comes out with its list of super rich promoters — and each time the endeavour has been to make the the exercise more vigorous, accurate and incisive. So, when we sat around the drawing board to plan this issue in March, we were subconsciously aware that the ‘bar’ would have to be raised a few notches higher. And did we raise it, and how!

Our first tough decision was to not have any base stock filters (such as market cap or days traded) this time round. The rationale behind this decision was to not miss even the smallest of promoters whose (multiple) holdings in separate companies could add up to Rs 100 crore —  the entry point to the BW Super Rich list. To up the accuracy ante, we partnered with the data team of Motilal Oswal Financial Services (MOFS), which provided us numerical and spreadsheet support.

The first step was to trawl through the 37,000-strong promoter list of 4,000 listed companies (PSUs and MNCs excluded). The idea was to identify promoters (promoter groups) that owned the companies on the list. Upon identifying the promoters, we sorted the list on the basis of promoter names. This helped us spot cross-holdings of promoters in various companies.

We grouped companies that belonged to specific promoters. We relied on annual reports and exchange disclosures to establish relationships between promoters and their cross-holdings in companies. In certain cases, we contacted company officials to get more insight into their shareholding structure.

Next, the MOFS data team flowed in numbers into this list. The calculation methodology for ‘super promoters’ is the number of shares held by promoters multiplied by the stock price on 31 March 2013 and 31 March 2014. The data is then sorted on the basis of promoter wealth as on 2014 —  and percentage change from 2013. At this point, we eliminated all promoters whose listed net worth was below Rs 100 crore. We had our list of 1,130 companies. This was checked and counter-checked, adjusted for changes in shareholding to derive 2014 numbers.

The promoter value, again, was derived in three stages. Firstly, we broke down the promoter/promoter group clutter. We identified one dominant promoter and segregated the value of his stake in the company. Secondly, we clubbed the value of shares held by other promoters (mostly family numbers).  Then we added both the values (promoter and family wealth) to calculate net promoter/promoter family or promoter group wealth. This exercise helped us identify changes in the shareholding position since the last list.

Once this was done, our list was almost ready – minus, of course, the numerous checks we ran across the database. We sorted out ‘new entrants’, ‘big spurt companies’ and ‘other billionaires’ from this list. In some companies, there are co-promoters who are not related to one another, but their holdings cannot be segregated because either the data is not available or because a major part of the promoter shareholding is held through corporate bodies. These promoters have been listed separately as ‘other billionaires’. New entrants (to the list) and big spurt companies (in terms of promoter wealth) are self-explanatory.

While we’ve taken adequate care not to miss out on eligible companies or promoters, it’ll be imprudent on our part to deem this list perfect. Unclear shareholding pattern, poor corporate disclosure and number fatigue (on our part) could have introduced minor errors or omissions. That said, this list gives a fair indication of the wealth of India’s top 550 promoters.

This edition is our way of honoring the spirit of business and enterprise in this country.

(This story was published in BW | Businessworld Issue Dated 14-07-2014)