The first thing to note about this year's BT 500 is its currency. The market cap figures come fresh off the oven. Instead of ranking companies based on their average market cap for the year ended March 31, 2002, which we did until last year, we've measured them on their latest, first-half market value. That's as current as current gets. The rationale for the change is simple: the business landscape has changed so much over the last one year that giving you a picture six months old wouldn't have been fair, dear reader. Just the same, to give you a sense of the change, we decided to give you market cap figures not just for the first half of 2001-02, but also the average market cap for the last two fiscal years.

The Deciding Metric

Apart from the average market capitalisation, our listing includes parameters such as total assets, return on total assets (ROTA), sales, net profits, and return on capital employed (ROCE). The average market capitalisation, however, remains the deciding metric in our rankings. Notwithstanding what some others may try to tell you, there's good reason for doing so: The market value of a company is universally recognised as a metric that factors in not just its present performance, but also its future prospects. Variables such as assets or sales cannot be the true measure of a company's worth since they fail to provide an idea of the company's ability to perform in the future. The market capitalisation, despite the hazards posed by a relatively shallow market like India, is more precise on that count.

Once again, the Mumbai-based Centre for Monitoring Indian Economy (CMIE) helped us in creating the database for our study. It began with a universe of 5,495 companies selected on the basis of their average market capitalisation on the Bombay Stock Exchange (BSE). Where the market capitalisation of a company on the BSE was not available, that on the NSE was taken.

Government-owned companies, banks, and financial institutions have been dealt with separately (See India's Most Valuable PSUs). After these exclusions, we were left with a master sample of 1,358 companies that traded between April 1, 2002, and September 30, 2002, both days included. The field of study was further narrowed down to the 1,258 companies that traded on at least 20 per cent of the 128 trading days in the period.

The Method

The BT-500 listing has been drawn up based on the market value of the companies all through the first half (April 1-September 30, 2002) of the financial year 2002-03.

To compute that, each company's market capitalisation was calculated on each trading day between April 1, 2002 to September 30, 2002. Those values were aggregated and divided by the number of days on which the scrip actually traded. This yielded a company's average market capitalisation for the fiscal's first half.

We have also have taken care not to lose sight of critical parameters other than market capitalisation. Our table India's Most Valuable Private Companies also assigns rankings in terms of sales and net profit. In most cases, the financial year ending is on March 31. But there are significant exceptions to this, and we have taken care to tell you when there is one.

The Definitions

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

Sales: Operating sales, excluding other income.

Net Profits: Profits after tax, interest and depreciation.

Market Capitalisation: Stock price multiplied by the number of shares outstanding.

Total Assets: Fixed assets plus current assets.

Return on Total Assets: Net profit divided by total assets.

Return on Capital Employed: Profit (usually profit before interest and tax) as a percentage of the capital employed (fixed assets + circulating capital - current liabilities).

Now that you know all about how we did it, dive straight in. There's much the numbers reveal.