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BT 500
How We Did It

The math behind the most comprehensive update on Indian companies.

Chances are, this is the first comprehensive update on the Indian market you'll be reading since the world started talking in a different tongue after that fateful morning of September 11, 2001. A reason why we decided to take another parameter-average market capitalisation of the top 500 companies between the period April 1-September 15, 2001.

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 capitalisation 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 the 500 according to marketcap for two more time-frames
Ranked each company on sales and net profits
Calculated the change in sales and net profits over the previous fiscal

In all other aspects, there's no change in the way we created this database, except that we dropped equity capital from the list and brought in one more parameter, the average market capitalisation for 1999-2000. Since we strive for value all the time-like our toppers whom you'd see in the list-we decided to rank the companies on the two aforementioned parameters too. That means three sets of ranking on three platforms of time. Giving you an idea of yesterday, today, and a little bit of tomorrow.

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 BSE.

In terms of exclusions, companies owned by the state-state-owned public sector companies, banks, and financial institutions (FI)-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, 2000, and March 31, 2001.

Our Methodology

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, 2000, and March 31, 2001. 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, 2000, and March 31, 2001, 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, 2001. 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.

MARKET CAPITALISATION: The average market value between April 1, 2000, and March, 31, 2001. In addition, the market capitalisation on March 31, 2001, and the average market capitalisation for the period between April 1, 2000, and September 15, 2001 have been presented alongside.

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

 

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