Home / News / India /  Self-made billionaires now dominate India’s rich list, not dynasts

As India suffered its biggest economic setback in decades due to the coronavirus pandemic, two of its best-known billionaires got richer. New deals lifted Mukesh Ambani and Gautam Adani to become twice as wealthy as they were in March, raising fears that a handful of billionaires may be cornering more and more of the country’s wealth.

Such fears may be overblown, a Mint analysis of billionaires’ wealth suggests. Over the past two decades, the clout of the richest billionaires has actually declined with an increase in the number of billionaires. Adani’s takeover of airports has generated legitimate concerns about monopoly and pricing power in a key infrastructure sector. But it is a bit far-fetched to say that Adani and Ambani control the levers of the Indian economy today.

Over 61% of the combined net worth of India’s billionaires in 2000 was concentrated in the hands of the three richest individuals. But by 2020, the share of these three—Ambani, Radhakishan Damani, and Shiv Nadar—had dropped to 20%. In fact, the share of the top five billionaires has steadily declined since the mid-2000s, and now stands at 26%.

Our analysis is based on data from the Forbes billionaires list released every March, and a database on billionaires compiled by the Peterson Institute for International Economics (PIIE), and considers only dollar billionaires (those whose net worth exceeds $1 billion).

The analysis shows that the share of self-made billionaires in India has gone up over the past two decades even though the rise has been slower than in other parts of the world. A 2016 PIIE research paper by Caroline Freund and Sarah Oliver had shown that self-made billionaires had been increasing in number across the world. The study classified wealth as “self-made" for those who had either founded a company or held a major position in a company that was not founded by any of their relatives.

Self-made billionaires had a combined net worth of $164.4 billion in March, accounting for over 50% of the total wealth of India’s 102 billionaires, an analysis of the latest Forbes list using the PIIE classification methodology shows.

The rise in the stature of self-made billionaires since the turn of the millennium suggests that India has succeeded to some extent in lowering the entry barriers for entrepreneurship and access to capital. However, even three decades after the economy was opened up, India still has a significantly lower proportion of self-made billionaires (59%) compared to the global figure (70%).

Which sectors are these new-age billionaires in? Technology is one. It’s created many self-made billionaires globally in recent years: they accounted for 12% of all billionaires in the US in 2015, Freund and Oliver found. In India, too, technology and other services-related sectors have seen a growth of newcomers to the ultra-rich list, most famously Paytm founder Vijay Shekhar Sharma, Byju’s founder Byju Raveendran and Flipkart founders Sachin Bansal and Binny Bansal.

In terms of net worth, the share of traditional industrial sectors, such as manufacturing, construction, mining and energy, has come down in India’s billionaire wealth from 57% in 2010 to 33% now. This also reflects the decline of these sectors and of entrenched business families in these sectors over time. Over the past decade, construction barons such as G.M. Rao, Vinod Goenka and Rakesh Wadhawan have dropped out of the billionaire list as the sector lost momentum and accumulated a pile of non-performing assets. Such troubles also displaced one of India’s most famous dynasts, Anil Ambani, from the list.

Yet, industrial barons have not disappeared entirely. With 28 billionaires, the top spot is still held by the manufacturing sector in India. Healthcare accounted for 17 of India’s 102 billionaires this year. Globally, finance and technology contribute the most billionaires after manufacturing.

The churn in India’s rich list, and the rise of self-made billionaires over time shows that the club of wealth-creators in the country is considerably diverse and dynamic. This does not, however, mean that inequality is not a concern. In 2019, Credit Suisse estimated in its annual report that 78% of India’s adult population had less than $10,000 in wealth, while just 1.8% had more than $100,000. But the new entrants to the billionaire club show that the opportunities for wealth creation are more diffused now than before.

A demographic analysis shows a typical Indian billionaire is a man past 60 years of age. Just 6% of Indian billionaires are women, compared to 12% globally. They include Savitri Jindal, Kiran Mazumdar-Shaw and Smita Crisha Godrej.

Just 5% are below 45 years of age, and nearly three in four are senior citizens, the oldest being Lachhman Das Mittal of the Sonalika Group, aged 89 years. The story is starkly different in China, where 61% of the billionaires are between 45 and 60 years of age. Four of the 20 richest Chinese individuals are aged 40 years or less—no one in the Indian list is.

China’s billionaires, led by Jack Ma, are indeed “different", as a research report by investment bank UBS observed in 2018. Chinese billionaires are younger than elsewhere, “relentlessly innovative", and “forever seizing new opportunities to make their companies fast growing, powerful and flexible", the report said. It attributed their rise to rapid urbanization and their use of technology among other factors.

In India, the median age of self-made billionaires is 65, as against 69 for those with inherited wealth, shows the Forbes data. Among newcomers—billionaires who were not on the list five years ago—self-made ones have a median age of 62, seven years younger than those with inherited wealth.

In the post-covid era, the global, as well as the Indian, list of billionaires may undergo several changes. In March, when the pandemic was still in its early stages, Forbes recorded 58 fewer billionaires globally than a year ago. Among those who remained on the list, 51% had lost wealth. In India, the March 2020 list had four fewer billionaires than the 2019 list.

The question is, will India see more of young, self-made billionaires in the years to come?


Tanay Sukumar

Tanay leads Mint's data journalism team. His role involves editing and overseeing the newspaper's diverse data offerings, ranging from deep analytical pieces to bite-sized social media charts.
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