 "Investors, Companies, markets")
Family-owned firms’ predominance in the Sensex is in relative decline over the life of the index. They have ceded ground to central public-sector undertakings (CPSUs) and companies owned by independent institutions.
Their number this year declined to 18 of the 30 from 22 in 1985.
Multinationals too lost part of their turf and their representation declined to two this year from five in 1985 and a high of six in 1990.
By comparison, there are now four CPSUs from none in 1985 and independent companies number six, up from two in 1985.
Among business conglomerates, the Tata group has largely maintained its presence with four in its tent this year, as against five, including Associated Cement Company (now ACC), in 1985. Two of these are original members of the index — Tata Steel (then Tata Iron and Steel Company) and Tata Motors Passenger Vehicles (earlier Tata Engineering & Locomotive Company). The biggest growth has, however, been reported by Reliance Industries Ltd (RIL), which is now the most valuable company, the Adani group, the Bajaj group, and the Bharti group. In contrast, historically big business groups such as those of various Birla wings, and those of the Goenkas, Thapars, and Wadias failed to grow and have no presence in the index today.
The scene in 1985
Family-owned firms were the most visible, besides a handful of multinationals and institutionally owned and professionally run companies. The 22 family-owned firms included RIL, Tata Steel, Grasim Industries, Bombay Dyeing, and Ceat.
There were six multinationals led by Hindustan Lever (now Hindustan Unilever) and ITC (then Indian Tobacco Company). Other Indian subsidiaries of multinationals included Nestle, Cummins, Siemens, and GlaxoSmithKline Pharmaceuticals.
Larsen & Toubro, an independent company owned by financial institutions such as insurance companies and UTI, was part of the index.
All index companies except Scindia Steam Navigation were in manufacturing. The index had no representation from banking, financial services, and insurance (BFSI), which dominates the Indian equity market now. There was no representation from information-technology services (IT) services and the technology sector either.
Among family-owned groups, the Tata group topped the list with five companies — Tata Steel, Tata Motors Passenger Vehicles, Tata Power, Indian Hotels Co, and ACC. They were followed by the Aditya Birla group, which had four, led by Grasim Industries. Other Birla companies included Hindalco, Indian Rayon (now part of Grasim Industries), and Century Textile & Industries (now Aditya Birla Real Estate).
Seven of the original members of Sensex are still there — RIL, ITC, Hindustan Unilever, Tata Steel, Tata Motors Passenger Vehicles, Mahindra & Mahindra, and Larsen & Toubro. Five companies part of the index then are now gone.
1985-90: Picture largely unchanged
The Sensex in 1990 continued to reflect the predominance of family-owned firms. In all 21 of the 30 were family-owned, led by companies from big business groups such as the Tatas, Birlas, Ambanis, Wadias, Thapars, and Mahindras.
The Tata group was the biggest contributor with six companies. There were six companies from three Birla groups. The Aditya Birla wing had four. The C K Birla group’s Hindustan Motors, which manufactured Ambassador cars, and Yash Birla group-owned Zenith Steel were part of the index in 1990. Both these companies are now defunct.
Other family-owned companies in 1990 included L M Thapar-owned paper maker Ballarpur Industries, Nusli Wadia-owned Bombay Dyeing, Rahul Bajaj’s speciality steel maker Mukand, the Walchand group’s automaker Premier Ltd, and R P Goenka-owned tyre maker Ceat.
Besides, there were six Indian subsidiaries of global multinationals. They were Hindustan Unilever, Nestle India, Siemens, Cummins India, Philips India, and GSK Pharma. The index included ITC, partly owned by tobacco giant British American Tobacco, and Larsen & Toubro.
However, as in 1985, manufacturing and industrial companies with no representation from the services sector were predominant. The exception was Great Eastern Shipping Company.
Seven companies part of Sensex in 1990 remain in the index while five have become defunct. These are Hindustan Motors, Zenith Steel, Ballarpur Industries, Premier Ltd, and Futura Polyesters.
1990-95: Little impact of liberalisation
The composition of the Sensex was largely unchanged in 1995 from 1990. Family-owned enterprises in the manufacturing and industrial sectors continued to be predominant. There were just two companies from the services sector in 1995 — Indian Hotels Company and Great Eastern Shipping Company — and there was still no representation from BFSI and IT services despite economic and regulatory changes brought in by economic liberalisation.
In all 21 of the 30 were family-owned in 1995; six were Indian subsidiaries of multinationals; two were independent and owned by institutions; and there was one representation from the public sector — Gujarat State Fertiliser Corporation, owned by the Gujarat government.
1995-2000: Stirrings of change
This period was when the index broke from the past and took on a shape that is still visible. It saw the relative decline of family-owned companies and manufacturing firms. They were replaced by financial-services firms and companies in IT services.
There were 16 family-owned companies in the index in the year 2000, the lowest till then. They were replaced by CPSUs; firms such as Infosys, National Institute of Information Technology (NIIT), Dr Reddy’s Laboratories, and Satyam Computer — all founded by first-generation entrepreneurs; and independent companies such as Industrial Credit & Investment Corporation of India (ICICI), which later merged into ICICI Bank.
There were four CPSUs in the index in 2000 including State Bank of India (SBI), Bharat Heavy Electricals Ltd (Bhel), Hindustan Petroleum Corporation, and Mahanagar Telephone Ltd, together accounting for 10 per cent of the combined market capitalisation of the 30 index companies.
2000-05: Transformation continues
The BSE Sensex continued its transformation in this phase with its tilt toward sunrise industries such as IT services & technology, telecom, banking & financial services, automotive, and health care. In 2005, nine of the 30 were from the services sector with four each from BFSI and IT services. In the same year, 17 were family-owned, accounting for more than 50 per cent of market capitalisation, down from 56.5 per cent in 2000.
2005-10: Rise of family-owned firms
The number of family-owned firms went up even as brick-and-mortar companies continued to give space to BFSI, IT services, and telecom. In all, 19 of the 30 in 2010 were family-owned, up from 17 in 2005, and their share in combined market capitalisation increased to 53.4 per cent.
For comparison, four CPSUs accounted for 23.7 per cent.
2010-15: TCS tops list
There was a relative decline of family-owned firms, whose number went down to 16 in 2015 and their contribution to market capitalisation slipped below 50 per cent for the first time since the data became available.
The IT services sector was now the second-biggest with three companies from this sector, with Tata Consultancy Services (TCS), Infosys, and Wipro together accounting for 19.6 per cent of market capitalisation. Individually, Tata Consultancy Services topped on this metric.
There were three Tata firms in the index in 2015 and one each from other prominent groups such as the Ambanis, Mahindras, Bajajs, Adanis, Bharti, and Wipro.
2015-20: RIL ahead of others
There was again a resurgence of family-owned firms with an increase in their number and market share. Their strength increased to 17 and, more important, their share in market capitalisation jumped to 59 per cent from around 50 per cent five years earlier. RIL became India’s most valuable firm by market capitalisation, a position it has held since.
2020-25: Pubic sector ups mcap share
Family-owned firms continued their resurgence with a further increase in their representation in the index at the expense of the public sector, independent companies, and multinationals. Currently 18 of the 30 are family-owned, which is the highest in the past 15 years. These account for 58.3 per cent of market capitalisation.
There are four public-sector companies in 2025, the same as in 2020, but their share in market cap jumped to 10.3 per cent from 6 per cent five years ago. Besides, there are two multinationals, and six index companies are independent and owned by institutions.
