Book: “Behold the Leviathan: The Unusual Rise of Modern India” by Mr. Saurabh Mukherjea and Nandita Raj.
Though I have not read the book and do not intend to, the following points are based on a YouTube transcript:
Behold the Leviathan – The Unsual Rise of Modern India
Points:
- Nominal GDP is growing at around 10%, while corporate earnings are shrinking.
- This disconnect is attributed to the fact that much of India’s economic vibrancy isn’t captured by the top 1,000 listed companies.
- A significant portion of the growth is concentrated in approximately 70,000 smaller, unlisted companies, which are outperforming the larger, listed firms.
- Around 60,000 companies in India, with profits of ₹1 crore or more, have been growing their profits at an average rate of 15% per year, with this accelerating to nearly 25% in the post-COVID era.
- This robust profit growth, particularly among unlisted companies, indicates a vast pool of potential investment opportunities.
This appears to be a complete U-turn from Saurabh Mukherjea’s earlier view that only 15 companies generate strong cash flows.
Recently, he also purchased 7–8 small-cap stocks, suggesting he now believes mega-caps are growing slower than small-caps.
My intention is not to criticize Saurabh Mukherjea—nor should anyone do so. The purpose is to understand whether this reflects a genuine shift or is merely a passing trend.
Questions:
- Are SMEs, small caps, and unlisted small companies truly growing faster than large caps?
- If yes, what are the reasons behind this growth?
- Is this a short-term phenomenon or a sign of structural changes?
- The earlier narrative emphasized “the big getting bigger.” Is this changing, or is this just a phase, after which large caps will regain their dominance?
This is a work in progress on my side; I may update the group if I come across any notable insights.
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