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<\/a>The GDPs of both countries have grown rapidly during this period. While China has seen a proportionate increase in its representation in Fortune Global 500, India has not.<\/p>\nThis has appeared to be an anomaly for a long time including up to\u00a0last year<\/a>.<\/p>\n But no longer.<\/p>\n I had an epiphany moment when\u00a0I read the following line in this\u00a0year’s FORTUNE GLOBAL 500 issue.<\/p>\n Britain, which boasted 40 Global 500 companies in 2000, has just 17 this year.<\/p><\/blockquote>\n Hmmm.<\/p>\n Given that UK’s economy has also grown during this period, the reduction in its Global 500 representation suggests that there doesn’t need to be any correlation<\/strong><\/em> between a country’s GDP and the number of Fortune Global 500 corporations it has.<\/p>\n Maybe it’s just that some economies expand by adding a few big companies that enter the Fortune Global 500 (e.g. China) whereas others do so more equitably i.e. via a lot of midsized companies that don’t enter the august list (e.g. UK, India).<\/p>\n Given the huge backlash in the current public discourse against income inequalities caused by large corporations, it may be a good thing that India does not have<\/em><\/strong> so many Fortune Global 500 companies.<\/p>\n With that chronic anomaly out of the way, here’s a quick overview of this year’s Fortune Global 500.<\/p>\n Walmart<\/strong> (USA) and Air Liquide<\/strong> (France) bring up the top and bottom of this year’s list of the world’s largest corporations.<\/p>\n The revenue of the last company on the list has grown by 5.26%<\/strong>\u00a0year-on-year (from US$ 23.556 billion last year to US$ 24.796 billion<\/strong> this year). With the sole exception of 2015-2016 when it dropped, the FG500 Qualifying Revenue\u00a0<\/strong><\/em>has shown positive y-o-y growth in every year of the past decade.<\/p>\n The Saudi oil giant Saudi Aramco<\/strong> makes its entry to the list at #6 with revenues of US$ 355.905 billion. It’s also the most profitable company on the list with profits of US$ 110.974 billion. The company is reportedly planning to go public next year. When that happens, Saudi Aramco will dwarf Amazon, Apple, Microsoft et al<\/em> to become the most valuable company in the world, with an expected market cap of US$ 3 trillion.<\/p>\n While Fortune Global 500 is a ranking of global corporations by revenues, the list also provides profit ranks. I tend to take a quick glance at ranking by profits just to gauge whether a company is punching above or below its revenue weight on profit. During this process, I stumbled upon an interesting tidbit: India’s largest company, Reliance Industries Limited<\/em>, has the same rank on revenues and profits (#106). I don’t recall coming across such a bizarre and amazing coincidence in my +25 years experience of tracking the Fortune 500 lists.<\/p>\n 6 out of the world’s 10 most profitable companies are in Financial Services<\/em>. This has been a consistent trend in the Fortune Global 500 lists over the past several years. The much vaunted disruption of traditional banks by new-age fintechs has not happened. Maybe as a nod to that, fintechs have stopped threatening to kill banks and started chanting the bank-partnership mantra. Big mistake in my opinion, but that’s the topic of another blog post<\/strong><\/a>.<\/p>\n Traditionally, banks are ranked by assets. But Fortune’s ranking is based on revenues, a metric I find more apt. IMO, assets\u00a0is the cards you’re dealt whereas revenues is how you play those cards. Thanks to that, India’s largest bank, State Bank of India<\/em>, finds a place on this list (#236). Had the list ranked banks on assets, SBI would be missing from it – it has just one-third the assets of the bank ranked next, Deutsche Bank<\/em> (#239). SBI makes up for its comparatively light asset base ($561 billion) with its disproportionately higher revenue (US$ 47.286 billion). In my blog post entitled\u00a0High NIM Propels Indian Banks Into FORTUNE 500<\/a>, I had attributed the higher revenue-to-asset ratio of SBI and other Indian banks to high Net Interest Margin<\/em> regime in India.<\/p>\n You can sell 10% of your company's equity for $100M & become a Unicorn ($1B market cap). But you can\u2019t sell 10% of your company's production for $500M & become a FORTUNE 500 corporation ($5B revenue). Ergo I find rankings of company size based on market cap a bit flaky.<\/p>\n — GTM360 (@GTM360) June 20, 2019<\/a><\/p><\/blockquote>\n
\n<\/a><\/p>\n<\/a><\/p>\n<\/a>The map used by FORTUNE <\/em>in its Global 500 issue shows India and many other countries in the eastern hemisphere upside down. I don’t know what this projection is called. This is the first time I’m seeing one like this.<\/p>\n\n