On the trail of wealth

How we estimated the wealth and earnings of the billionaires

BS Research Bureau


For the regular corporate, we have used the accepted method of estimating wealth based on the market value of their holdings in listed companies. This is the category we have been estimating for the last five years. Like last year, in line with the international practice, we have taken out the crossholding structure of their stakes. This results in wealth estimates based on the promoters' direct holding in listed companies.

This year too we estimated net worth by taking average market prices for the month. So we estimated wealth for the current period on the basis of the average price for August 2003 and similarly for December 2002 for comparison purposes. Also, we estimated the net worth of individual promoters (or even members of the promoter family) if the share-holding break-up is available for these individuals.

We've also looked at the salaried, for the third time. This covers both company stakeholders who are paid a salary and professional managers. Technically speaking, this is a different genre. Unlike the previous two categories which are based on the stock concept of wealth, these are based on the flow concept of income. So obviously, those who are paid fat salaries earning billionaires cannot be compared with billionaires.

Within the salaried lot, who are more accurately millionaires, the biggest group is of the professional managers whom we call middle-class millionaires. Their earnings are reported in the annual reports of companies. By and large, these are very accurate but because of innovative compensation structuring, may tend to be a tad lower than actual earnings.

There is no systemic bias in the data. Data for promoters net worth are sourced from shareholding pattern information published by the Bombay Stock Exchage. The data on the salaried are sourced from the annual reports of the respective companies for year ending between September 2002 and March 2003.

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