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It wasn't rocket science, but pure arithmetic that we used.


The BT-500: Why They're Changing

The Perspective Of Star Fund Managers

2005: A Market-cap Odyssey

What's Better What's Best

The first thing you would notice about the BT-500 tables this time is that they are smaller than their predecessors of the past eight years. Company data, traditionally presented in a double-spread, has been tightened to fit in one page. Also, there is no BT-500 Directory.

There's a reason behind the changes: while we wanted to give the numbers-hungry a comprehensive listing of India's 500 most valuable companies, we did not want to short-change our other readers. Therefore, you would find most of our regular sections intact-albeit thinner.

In all other aspects, there's no change in the way we created this database. Once again, it was the Mumbai-based Centre for Monitoring Indian Economy (CMIE) to whom we entrusted the arduous task of crunching megabytes of data. CMIE began with a universe of 4,894 companies selected on the basis of their average market capitalisation on the Bombay Stock Exchange (BSE).

In terms of exclusions, companies owned by the state-Central or states-owned public sector companies, banks, and financial institutions-were omitted from the sample unless the government's equity stake in them had fallen to at most 50 per cent last year. Instead, they were analysed in a separate study, The Most Valuable PSUs. Eventually, our master sample constituted the 1,350 companies that traded for at least seven days between April 1, 1999, and March 31, 2000.

Our Methodology

How We Crunched The Numbers

Began with a universe of 4,894 companies
Separated public sector units from private companies
Eliminated stocks that traded for less than 20% of 251 traded days
Computed the daily market capitalisation of each company
Aggregated the daily market capitalization of each company
Divided the aggregate by the number of days the scrip was traded
Ranked the 500 most valuable companies by market capitalisation
Ranked each company on sales and net profits

Ever since the year before last, the BT-500 listing has been drawn up based on each company's market value all through the financial year-and not just on March 31. To compute that, each company's market capitalisation was calculated on each trading day between April 1, 1999, and March 31, 2000. Those values were aggregated and divided by the number of days on which the scrip actually traded. This yielded the company's average market value for the year.

Companies that were thinly traded had to be eliminated. Since the BSE was open for trading on 251 days between April 1, 1999, and March 31, 2000, all those companies whose stocks traded for fewer than a minimum of 20 per cent of the total number of trading days-or 51 days-were excluded from the study. To facilitate comparison, the accounting period was standardised as the financial year ended March 31, 2000. In the case of companies whose accounting years ended on any other dates-say, December 31-the figures for the latest financial year for which results were declared were used. Sales and profit figures are annualised.

Our Definitions

All the definitions used in the computation and the presentation of BT-500 are standard.

Sales: Operating Sales plus Other Income and Excise.

Net Profits: Profits After Tax, Interest, and Depreciation.

Earnings Per Share (EPS): Net Profits divided by the number of Equity Shares.

Equity: The paid-up shareholder capital.

Market Capitalisation: The average market value between April 1, 1999, and March, 31, 2000. In addition, the market capitalisation on March 31, 2000 has been presented alongside.

All the data for this research project was provided by the CMIE, and analysed by Team BT.


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