NEW DELHI: India ranks third globally in terms of number of family-owned businesses with 111 companies having a total market capitalisation of $839 billion. India closely follows China with 159 firms and the US with 121 firms, says a report.
According to the ‘Credit Suisse Family 1000 in 2018’ study, published by the
Credit Suisse Research Institute (CSRI), in terms of number of family-owned businesses within the non-Japan Asian region, the list is dominated by China, India and Hong Kong. These three jurisdictions together account for around 65 per cent of the non-Japan Asian section of CSRI’s database, and have a combined market capitalisation of $2.8 trillion (or 71 per cent) of the market share.
Korea came in fourth place, with 43 companies ($434-billion market capitalisation), followed by Indonesia, Malaysia, the Philippines and Thailand, each with 26 companies. The report covered 11 markets in the non-Japan Asian region, which continue to dominate and represent a 53 per cent share of the universe, with a total market capitalisation of over $4 trillion.
The report further noted that in 2017 alone, non-Japan-Asia-based family-owned companies generated 25.6 per cent greater cash flow return on investment (CFROI) than their non-family owned counterparts, and delivered a 4.2 per cent out performance in annual average share price return since 2006.
Credit Suisse head analyst (thematic investments) and the report’s lead author Eugene Klerk said, “This year, we find family-owned businesses are continuing to outperform their peers in every region, every sector, whatever their size. We believe this is down to the longer-term outlook of family-owned businesses relying less on
external funding and investing more in research and development.”
Indian family-owned companies generated a 13.9 per cent annual average share price return since 2006, compared to 6 per cent recorded by their non-family-owned peers, the report said. Further, out of the top 50 most profitable companies globally, 24 were from Asia, with a total market capitalisation of $748 billion. The list included 12 Indian family-owned companies with a total market capitalisation of $192 billion.
Additionally, in non-Japan Asia, more than 50 per cent of the top 30 best performing companies are from India, followed by one third from China. Malaysia occupies third place with three companies, while Korea and Indonesia each have one, the report added.
