Most unlisted Indian companies are not in the pink of health. That, at least, is what a Business Standard Research Bureau study based on Centre for Monitoring Indian Economy data on unlisted Indian firms suggests.
The total revenue of 11,542 unlisted companies increased just 6.34 per cent, though they reported a lower net loss of Rs 1,921.45 crore (Rs 19.21 billion) in 2001-2002 than the net loss of Rs 4,090.68 crore (Rs 40.91 billion) in 2000-2001. Their interest costs increased 3.92 per cent and corporate tax payments climbed 1.88 per cent.
First Source, CMIE's databank, provides information on 40,000 unlisted limited firms. However, financial data for 11,617 firms is available for 2001-2002 and 2000-2001. The Business Standard Research Bureau study is, therefore, based on the 11,617 companies.
Strikingly, revenues and profits are hugely concentrated in a few major unlisted companies. Seventy-five companies -- accounting for 0.64 per cent of the total sample size -- generated 60.76 per cent of the revenue and 106.43 per cent of the net profits.
They also accounted for 74.19 per cent of the total capital employed in unlisted companies.
Excluding the top 75 firms, or 25 each from the unlisted private limited company universe, the finance company world and unlisted public sector undertakings -- the aggregate performance of the remaining 11,542 firms has been extremely poor.
The top 75 firms have done exceedingly well, with revenue growing over 20.90 per cent and net profits 83.08 per cent in 2001-02. These firms controlled their total expenditure, which increased by just 15.02 per cent during the year. Interest costs rose 8.83 per cent and corporate tax payments moved up 28.56 per cent.
The fact that the top 75 are going great guns may account for the overall good performance of the universe of unlisted companies. The total income of 11,617 unlisted companies increased 14.74 per cent and their net profits grew 139.38 per cent in 2001-02.
This blistering performance looks pretty good compared with the performance of BS 1,000 companies, which posted sales growth of a mere 3 per cent and aggregate profits that were over 4 per cent lower in 2001-2002 than in the previous year.
Interestingly, three groups -- general (non-finance) private companies, public sector undertakings, and banks and credit companies -- together shared nearly a third of the full sample's total income in 2001-2002.
Of the 11,617 unlisted firms, 7,617 private firms accounted for 37.05 per cent, 207 public sector undertakings for 32.07 per cent and 3,790 finance firms for 30.88 per cent of the total income of unlisted firms.
But when it comes to the total net profit, the finance sector -- predominately banks --accounts for 60.81 per cent, while public sector undertakings account for 36.03 per cent. Private firms account for a minuscule 3.16 per cent of the aggregate net profits.