Nothing, not even Hindenburg Research, seems to stop the advance of Indian big business. The Adani Group continues with its acquisitions, even if at a slower pace, and has been able to persuade financial markets to lend it more money, notwithstanding assessments that it is over-dependent on debt. Reliance Industries Limited has announced the demerger of its financial services arm to establish a new entity, which media speculation sees as a bid by the group to establish a dominant presence in the financial services industry. The demerger is being seen as a repeat of the strategy adopted by the group in areas stretching from telecommunications and the retail trade to the media and entertainment businesses. Other business groups such as the Tatas and the Aditya Birla empire seem to also be performing well. The biggest of India’s big businesses seem to be thriving.
But this assessment is not true of all of business in India. It is not just that small- and medium-scale firms, not to mention the large mass of informal enterprises, are not doing well and are yet to recover their COVID-19-inflicted losses. Many established big business names do not share the good fortune of the big few. A former Reserve Bank of India Deputy Governor and his co-author report in a much-cited paper that the share of assets in the non-financial sectors owned by the Big-5 business groups has risen from 10% in 1991 to nearly 18% in 2021, whereas the share of the next five has fallen from 18% to less than 9%. While their claim that increased concentration is contributing to inflation has been challenged, the evidence they provide of significantly increased concentration has not.
