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Even as business scandals and deceptive accounting systems rocked India Inc last year, family owned businesses (FOBs) emerged strong by accounting for 60 per cent of market cap among the top 500 companies in the country, a study said.
“Commitment and continuity are the two most important elements in shaping an organisation and can compensate for even low competence,” Bajaj Electricals’ Chairman and Managing Director, Mr Shekhar Bajaj, told PTI.
According to the study by ASK Investment Managers, FOBs comprise 17 per cent of the IT Industry, 10 per cent of refineries, 7 per cent of automobile and 6 per cent of telecom in India.
“FOBs’ ability to have significant compounding returns over a long period of time is attributed to their dominant operations mostly in sunrise industries. This dominance further justifies their abilities in cost efficiencies,” ASK’s CEO, Mr Sameer Kamdar, said.
The CAGR of the top 500 performers over last 5 years also illustrates the wealth-creating ability of entrepreneur firms. While the PSUs posted a double-digit growth, FOBs have posted a staggering triple-digit growth.
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