News: 'India a better place to invest'

(BL 01/08/2006) Chennai - This is the kind of headline that will gladden any Indian heart - `Indian Tiger trumps Chinese dragon,' more so because it's the latest survey of Forbes magazine that says so.

Its second annual survey of India's top 40 companies begins thus: "Foreigners can be forgiven for forgetting it, but there is more to India's economy than information technology outsourcing," adding, "it is dominated by banking, energy and manufacturing groups."

It points out that India's big three in IT - TCS, Wipro and Infosys Technologies - "together have only 40 per cent of the sales of Reliance Industries, the energy, chemicals and textiles conglomerate that tops our list." The list is not gauged by size alone; profits, assets and market value have also been taken into account.

Here are the 10 richest Indians - Lakshmi Mittal leading the pack with a wealth of $20 billion. Second on the list is Wipro's Azim Premji ($11 billion), followed by Mukesh Ambani ($7 billion), Anil Ambani ($5.5 billion), Kushal Pal Singh ($5 billion), Sunil Mittal ($4.9 billion), Kumar Mangalam Birla ($4.4 billion), Tulsi Tanti ($3.7 billion), Pallonji Mistry ($3.3 billion) and Anurag Dikshit ($3.1 billion).

To qualify on the list of the richest 40, a net worth of at least $590 million - up from last year's $305 million - was required. Incidentally the richest Chinese - Lary Rong Zhijian's net worth at $1.64 billion is less than that of the 10th richest Indian - Anurag Dikshit ($3.1 billion).

Interestingly, India has 27 billionaires, against only 10 of China, and the 40 richest Indians have a collective net worth of $106 billion against the 40 richest Chinese with a collective net worth of only $61 billion.

Making a strong pitch for investing in Indian equity vis-à-vis the Chinese market, the Forbes survey says that India's clear advantages are its democracy, rule of law, English language fluency and half of its population being under 25. Other advantages - it's a "natural ally" of the US, while America's "relationship with China will at best be wary and tense." Also, while China's state-owned companies have "staying power," government ownership was bound to limit their growth and potential.

But while the investment opportunities in India are tremendous, investors needed to "tread very carefully at this stage," as the companies were not exactly cheap. Even though not all that expensive at these levels, at around 18 times earnings, "the market is not especially cheap anymore either. But that doesn't mean it's too late to get involved. The recent correction was long overdue and healthy. Fundamentally, India's top companies are as strong as ever."