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Eight Indian firms among S&P's challengers to global majors

BS Reporter  |  New Delhi 

Eight Indian firms from industries as diverse as cement, hospitality, textiles and consumer goods are expected to emerge as challengers to the world's leading blue chip companies, according to rating agency Standard & Poor's (S&P) annual rating of global challengers.
The eight Indian are part of S&P's list of 300 mid-size across 37 countries in the latest S&P Global Challengers List. India ranks seventh in terms of the per country that figure in the list. In contrast, China has four companies on the list. Japan has the highest at 62, followed by the US with 58, the UK with 19 and Australia with 15.
The Class of 2007 list suggests the growing significance of manufacturing in India, given that five of the eight firms are in this sector. Significantly, no Indian information technology company figures in the list.
EIGHT OF THE BEST
(Indian companies in S&P's list of global challengers)

Market Cap
($million)

ACC 4,590.91
Siemens India 4,320.96
Indian Hotels Co. 2,044.46
Lakshmi Machine Works 1,004.50
Titan Industries 861.56
Marico 742.54
Hotel Leela Venture 530.02
Jain Irrigation Systems 505.19
Source: S&P, m-cap as of Dec 31, 2006
Explaining the reasons, New York-based Siddharth Panjwani, director, portfolio-index services, S&P, said no Indian infotech company figured within the required market capitalisation range of $500 million to $5 billion.
Last year, seven Indian companies were in the list but, again, there were no infotech firms. The seven companies were Chennai Petroleum, Bharat Forge, Siemens India (the only repeat this year), UTI Bank, PNB, Nicholas Piramal and Oriental Bank of Commerce.
The universe for the list consists of publically listed companies from around the world with a minimum market capitalisation of $500 million and a maximum of $5 billion as of December 31.
All eligible companies need to have positive three year earnings per share, sales and employee count growth. The list is reconstituted once a year in April.
Based on the sectors represented in the 2007 list, industrial companies lead the charge, followed by financial and consumer firms.
Regionally, the Americas represent 22.67 per cent of the list's composition, followed by the Asia-Pacific (41.67 per cent), Europe (33.33 per cent) and West Asia-Africa (2.33 per cent).
"In the Darwinian sense, mid-caps are truly positioned in an evolutionary sweet spot, having survived their start-up phases and offering stability as well as rapid growth opportunities in the future," said Srikant Dash, index strategist at S&P, adding, "Mid-cap firms can be thought of as having overcome the growing pains of small firms and thus, a lot less risky than small-cap start-ups. The Class of 2007 offers the best potential pool of companies that could become tomorrow's leaders."

First Published: Fri, May 11 2007. 00:00 IST
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