When we at Inc. India decided to wade into the uncharted waters recognising business excellence among mid-sized enterprises in India, we were faced with a dilemma. Should we look at sales growth over a period of time? Or, should we look at the overall performance of a company?

Over the last two years, we opted for the latter. But we realised that assessing the overall financial performance of these companies—mostly unlisted and largely family owned—was far more difficult than the common job of covering listed companies and our approach filtered out many deserving entities for lack of data.

Hence this year we have decided to look at sales growth alone, mainly to allow a wider coverage of unlisted and privately-held businesses. While there are more than 8.5 lakh registered companies in the country, we only get to hear about the 7000-odd listed companies. So we changed our approach to identify future winners in India’s rapidly transitioning mid-size space.

We began by creating three “master lists” of more than 3,500 companies across 35 sectors—one each for public listed companies, public unlisted companies and privately-held businesses. We excluded BFSIs (revenue is difficult to define), PSUs (not really independent) and companies whose group turnover exceeds Rs 1,500 crore. These companies were then assessed by Inc. India’s research team on the following:

  1. Digital presence: Each company was subjectively assessed on a scale of 1 to 5 on
      company website and availability of company information online.
  2. Leadership: The leadership was assessed on information available online. In this
      digital world, absence of information on top management is regarded as
      ‘‘not keeping up with the Joneses”, and hence penalised.
  3. Year of incorporation and line of business

After this subjective assessment, we assessed net sales data of the last four financial years. Where annual data was not available, relevant quarterly data was tabulated to arrive at this information. Finally, to rank the companies under each master-list, we calculated the compound annual growth rates (CAGR) of net sales. The final Inc. India 500 consists of 200 listed companies, 200 unlisted public companies and 100 privately held businesses

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