Mar 11, 2006

An India Arriving Story

The new Forbes Billionaire list has been published and India has 23 billionaires on it. Gautam Chikermane wrote this in the Indian Express:

This year, there are 23 Indian billionaires — more than Brazil’s 16, China’s 8, France’s 14, Hong Kong’s 17, and one short of Japan’s and UK’s 24 (at 371, US leads by multiples). Compared to last year’s deadly dozen that’s almost a doubling of numbers. Even as Lakshmi Mittal (Rank 5; net worth $23.5 billion) continues to lead Indian billionaires by a wide margin, Azim Premji (Rank 25; net worth $13.3 billion) stays well ahead of the rest. Brothers Ambani, Sunil Mittal, Shiv Nadar, Kumar Mangalam Birla and Pallonji Mistry are the other usual suspects in the list. A mix characterised largely by inherited fortunes that the next generation has been able to multiply.
But it is the new, self-made entrants that show how much wealth can be created when hungry enterprise marries the market. IIT-D alumnus Anurak Dikshit, 34, controls 32 per cent of PartyGaming, an online gaming company. With a net worth of $3.3 billion, he is 207 on the Forbes list and the 10th richest Indian. A stock market listing, even if the stock at Rs 969 has been lying dormant and below offer price, has brought Naresh Goel, 56 (Rank 512; net worth $1.5 billion) into this list and made him the 16th wealthiest Indian. Or meet Tulsi Tanti, 48, who moved from textiles to alternative energy and whose company Suzlon is becoming the darling of investors — since listing, the stock which has jumped 2.5-fold in less than six months to Rs 1,288 has made it India’s 15th most valuable company.
It’s not that these 23 billionaires have suddenly emerged from the shadows. Way back in 2000, riding the tech boom, India had as many as nine billionaires in the Forbes list. The number fell to four the next year when the market crashed but since then it has steadily risen to five in 2002, seven in 2003, nine in 2004, 12 last year, and 23 today. Interestingly, the number of Indian Indians — that is Indians living and operating from India — has increased from 75 per cent in 2005 to 83 per cent today. Lakshmi Mittal, Anil Agarwal and Naresh Geol operate from the UK, while Dikshit works out of Gibraltar since gambling is legal there.
The combined wealth of Indian billionaires is $98.8 billion, 61 per cent higher than the previous year’s figure. Over the past decade, Indian billionaires’ wealth has grown by 36 per cent per annum. The pace has increased in the past five years, rising 47 per cent per annum, illustrating the India Arriving story. In 2000, the heyday of the tech boom, when any company with a ‘tech’, an ‘infosys’ or a ‘soft’ in a prefix, suffix or anywhere in between, was being lapped up and its prices were rising at 100 per cent per month, Indian billionaires’ wealth had jumped five-fold. In 2004, it doubled to $31.9 billion, and the next year it rose by 92 per cent to $61.3 billion. The only two years when it fell were hangovers of the tech bust, in 2001 and 2002.
If the past is any indication and the wealth of Indian billionaires continues to rise at historic rates, by 2014 India’s 114 billionaires should have a combined net worth of over a trillion dollars; and by 2016, 176 of them should be worth more than $2 trillion. If that sounds a simplistic extrapolation of an optimistic number-cruncher, I plead partially guilty. Yes, I am optimistic about India, about Indian enterprise, about India’s opportunities. And for those who point out the road blocks, physical, political or economic, which will come in the way, I can only say that you’re looking at an empty glass. For, each of those road blocks is an opportunity for entrepreneurs to create wealth.

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