Reliance Industries (RIL) ended the ten-year reign of Indian Oil Corporation (IOC) as India’s largest corporation on the Fortune India 500 list, driven by its consumer-facing businesses such as integrated retail and telecom. The Mukesh Ambani-led conglomerate has also become the first private-held and the only corporation to top the list since it was first released in 2010, apart from the state-run oil refiner.
In the fiscal year 2019, RIL reported a 41.5 percent increase in revenue, 8.4 percent higher than IOC, the second largest corporation on the list. RIL’s FY19 revenue stood at about 5.81 lakh crore, while IOC reported a 26.6 percent increase in sales in the same year to about 5.36 lakh crore. Also, RIL’s income for FY19 was more than twice that of IOC, at about $39,588.
The income of the oil-to-retail group has been three times higher on average over the past 10 years than that of the IOC. Relative to IOC, the maximum it reached was up to 4.8 times, in FY15 when the income of RIL was about 23,566 crore and the main of the public sector stood at about 4,912 crores.
In the last fiscal period, organized retail accounted for 17% of the top line of RIL, while digital services accounted for 6.04%. In contrast, refining contributed 19.2% of RIL’s revenue in FY14, while petrochemicals contributed 74.9% to a chunk of revenues. In FY19, the contribution from the refining sector dropped to 51.1% and from petrochemicals to 22.3%.
Highs and Lows
Overall, Fortune India’s 500 companies ‘ revenue in the 2019 list grew by 9.53%, while profit increased by 11.8%. For reasons like restructuring within public sector banks, public sector undertakings, and the private sector, a total of 57 companies fell off the list. It should be remembered that the list does not take into account companies ‘ subsidiaries, so many of the takeovers led to the exclusion of the acquired firms. Some of these names include the Hindustan Petroleum Corporation Limited acquired by ONGC; the Power Finance Corporation acquired the REC (formerly Rural Electrification Corporation Limited); and, Vijaya Bank and Dena Bank have merged into Baroda Bank. Tata Steel bought troubled steelmaker Bhushan Steel in the private sector, while IDFC Bank combined Capital First to create IDFC First Bank.
The total loss reported by the 500 firms also dropped this year, with 65 firms reporting a cumulative loss of some 1.67 lakh crore, compared to 79 firms racked up last year’s 2 lakh crore.
The disparity in the fortunes of public and private sector banks is an interesting aspect of the 2019 report. Up to 14 of 22 banks in the public sector recorded total losses of some $74,253. On the other hand, only two banks in the private sector reported losses (IDFC First Bank at some crores of 1907.9; and Lakshmi Vilas Bank, at ₹894.1 crores).
The total profit of 24 of the total banks in the private sector (including foreign banks and cooperative banks) was approximately 660,747 crore, a rise of 6.16 percent over FY18.
The oil and gas sector (with eight companies) accounted for 22.3% of the 500 companies ‘ total revenue, led by banking with 15.88% of the total. Based on the number of companies on the list, the banking sector, with 48 firms, is also the largest contributor. Nevertheless, oil and gas have the highest profit share in the 500, at 23.44%.
With 20 firms, the infotech sector accounts for 4.98% of the 500’s total revenue, but has the second-highest share of all companies ‘ total profit on the list, at 16.17%.
The 500 corporations ‘ gross employee costs rose this year by 7.26 percent, compared to 10.22 percent in the previous year.
Manufacturer HEG Ltd saw the largest 181-seat leap on the list, rising in 2019 to No. 206. Graphite India preceded HEG at No. 172 with a 171-seat leap. Wire rope maker Usha Martin saw the 161-place highest fall, finishing at No. 441.