Rich List: India moguls find ally in Modi

Family-owned conglomerates like Tata and Mittal continue to expand holdings on the back of policy support courtesy of business-friendly Prime Minister Narendra Modi.
Lakshmi Mittal
Lakshmi Mittal

Prime Minister Narendra Modi’s government was elected last year to implement radical reforms to open up and boost the economy, reduce bureaucratic waste and induce greater transparency. Investors responded enthusiastically by buying equities and economic activity surged.

Lower commodity prices also helped. The Tata conglomerate, which has businesses in almost every major domestic industrial sector as well as extensive international interests, benefited from this highly-charged positive environment.

The Tata family, No. 3 on FinanceAsia's 2015 Rich List, has long been synonymous with India's economic rise. Best known for car making and consulting, the conglomerate is led by patriarch Ratan and his close associate Cyrus Pallonji Mistry (11), chairman of Tata Group. 

Large earnings are accrued from Tata Consultancy Services, which has a market capitalisation of more than $80 billion, and dividends are channelled through Tata Sons -- a vehicle held by the family and Mistry and intended to build on the patriarch's original holding.

Azim Premji (18) and his family continued to grow their Wipro outsourcing empire, which is rooted in his father’s vegetable business founded seventy years ago. The group has expanded into India’s dynamic IT sector, buying stakes in e-commerce firm Snapdeal and e-tailer Myntra.

The family’s position in the list advanced from number 35 last year due to the group’s higher revenues. Mukesh Ambani, by some estimates of net worth India’s richest man, continued to receive substantial dividends from his listed companies despite further allegations of corporate misconduct
in its core petroleum division. Reliance Industries’ telecommunication business is growing and he is expanding into the banking sector.

Lakshmi Mittal (39) is a new entry into the list, receiving a $131 million dividend from Arcelor Mittal, the world’s largest steelmaker, despite lower revenues from declining commodity markets.

 

Examining dividend income to determine rich list

FinanceAsia analyses the publically listed assets of Asia (ex-Japan)’s leading business families and aggregates the dividends paid to them through their shareholdings or to their trusts or charitable foundations.

This methodology provides a more dynamic picture of wealth in the region than can be achieved by estimates of net worth, but clearly underestimates the fortunes of individuals and families whose wealth is mainly derived from non-income earning or wholly private assets. We identify a large universe of companies with large or controlling shareholders and gather information on ownership stakes and dividend payouts based on statements made to stock exchanges, newswires and, in the first instance, declarations made in annual reports.

Some holdings are opaque because of complex cross-shareholding structures such as the Lee family’s control of
Samsung and the Keswick’s control of Jardine Matheson, so there are inevitable instances of under-reporting of some tycoon’s wealth.

 

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