Rupee woes fail to slow rise in India's billion-dollar unlisted firms

Ambani-owned firms, MNC subsidiaries claim top spots

Even as the earnings of listed companies in India have shot up in the post-pandemic period, sending the markets to great heights, the unlisted segment has not been far behind.

 

The group of unlisted firms has shown up dozens of companies with revenues of more than $1 billion over the past five years, shows an analysis of the data from Capitaline.

 

There were 190 such firms in 2019-20 (FY20). This rose to 249 in FY23. The numbers for FY24 are still being released, but the figure has reached 153 (chart 1).

 

Brokerage firm Zerodha crossed $1 billion in revenue in FY24, according to reports on Tuesday.

 

The analysis considered companies whose financial year ends in March. Some companies’ year ends in December. They also have billion-dollar revenues, such as Maharashtra-based Hexaware Technologies and New Delhi’s India Yamaha Motor. Trading companies can report large revenues because of the nature of their activities. The analysis considered reported net sales, irrespective of the nature of the business, for uniformity. 

 

It also took into account the changing values of the rupee against the dollar over this period. The numbers for each year reflect companies that had a billion dollars in sales as of the prevailing exchange rate at the time. India’s currency has depreciated over the years, which means that the rise in the billion-dollar firms comes despite the headwinds of a weakening currency.

 

Sectors that can grow in a depreciating-currency environment, such as information technology, have led the list. There were 16 companies that were part of the club in FY24. Second on the list was trading, followed by automobiles, insurance, and power generation and distribution (chart 2).

 

Some of the biggest companies on the list are also subsidiaries of unlisted companies, such as Reliance Retail and Reliance Jio, whose listing has been speculated upon. Among other notables was e-commerce company Flipkart (Rs 70,542 crore in net sales) and consumer electronics firm Apple India (Rs 66,728 crore).

 

Flipkart was the only one among the top 10 that reported losses in FY24. It had operating losses of Rs 3,891 crore and a net loss of Rs 4,248 crore.

 

The scrutiny of India’s unlisted space has been rising. The Securities and Exchange Board of India has cautioned investors about buying and selling shares of unlisted companies by using platforms that have gained in popularity for this purpose.

 

“…certain electronic platforms and/or websites are facilitating transaction in unlisted securities of public limited companies. Such activities are in violation of Securities Contract (Regulation) Act, 1956 and SEBI Act, 1992 which are, inter alia, laws designed to regulate and protect the interest of investors in securities market,” said the December 9 statement.

 

“Investors are advised not to conduct any transactions on such electronic platforms or share any sensitive personal details on the same as these platforms are neither authorized nor recognized by SEBI,” it added.

 

Multinational companies (MNCs) have a significant presence on the list. Five of the top seven on the list for FY24 are classified as “MNC Associates”. A few developed states account for most of the firms. Only one, Samsung, is based out of New Delhi.

 

Maharashtra, Gujarat, and Karnataka account for two each.