Here’s what it takes to make a trillion-dollar company
Business Insider India
- There are only a few trillion-dollar companies in the world, and the Adani Group wants to join their ranks next.
- Currently, the list of trillion-dollar companies includes Apple, Saudi Aramco, Microsoft, Alphabet and Amazon.
- We take a look at how long it took these companies to hit the trillion-dollar market cap and where they are now.
AdvertisementThere are a handful of companies that are valued at trillion dollars or more. The list includes Apple, Saudi Aramco, Microsoft, Google parent Alphabet and Amazon. The Adani Group – headed by Gautam Adani, India’s richest and world’s fourth richest person – wants to join their ranks.
The Adani Group’s rise has been meteoric over the past few years – both in terms of market cap and presence across several sectors like mining, power, infrastructure, logistics and beyond.
“Given what we had as a set of companies, we believed that if we had assets and companies of that type we should really be a $1 trillion group,” Jugeshinder ‘Robbie’ Singh, chief financial officer, Adani Group, told Business Insider India.
Adani Group’s valuation has surged from $16 billion in 2015 to $260 billion in 2022 – a surge of over 16x in seven years. But going from $260 billion to $1 trillion could take the group some time.
Business Insider delves into what it takes to become a trillion-dollar company, and how much time it took for these companies to cross $250 billion and trillion-dollar valuation marks.
Hitting the first milestone – $250 billion
Arguably, starting a company and hitting the $250 billion dollar milestone is a tough feat. It took an average of over 16 years from the listing date for Apple, Google, Microsoft and Amazon for their market caps to hit $250 billion.
Apple took the longest time, at 30 years. Microsoft was the first to hit $250 billion in market cap, back in 1998 before the dot com crash.
|Company||Years to hit $250 bn mcap|
In contrast, the Adani Group, starting with the listing of Adani Enterprises in 1994, took 28 years to cross a cumulative market cap of $250 billion, in 2022.
It is worth noting that the Adani Group currently has seven companies – these companies were all listed at different points of time, with Adani Wilmar being the latest in this year.
One trillion dollar behemoths
The journey from the $250 billion to $1 trillion market cap was relatively quicker for Apple and Amazon, while Google and Microsoft took considerably longer to reach the milestone.
|Company||Years from $250 bn to $1 tn mcap|
Here’s what these trillion-dollar behemoths made in 2021
Not for nothing are Apple, Microsoft, Alphabet and Amazon trillion-dollar companies – all the four companies raked in hundreds of billions of dollars in revenues in 2021.
AdvertisementAmazon, which made the least amount of profits with the highest amount of revenue, still ended up with over $33 billion in net income – or over 19x of the Adani Group’s profits in FY22.
|Revenue||$365.8 billion||$168 billion||$256.6 billion||$469.8 billion|
|Net profit||$94.7 billion||$61.3 billion||$76 billion||$33.4 billion|
Source: Company reports, for full year 2021
In comparison, the Adani Group had a total revenue of $24.4 billion and a net profit of $1.7 billion in FY22 (at $1 = ₹80).
Here’s a breakdown of how each group company fared in the year:
|Adani Enterprises||₹70,433 crore||₹777 crore|
|Adani Wilmar||₹54,386 crore||₹804 crore|
|Adani Power||₹31,687 crore||₹4,912 crore|
|Adani Ports||₹18,089 crore||₹4,728 crore|
|Adani Transmission||₹11,862 crore||₹1,205 crore|
|Adani Green||₹5,577 crore||₹489 crore|
|Adani Total Gas||₹3,079 crore||₹509 crore|
|Total||₹1,95,113 crore||₹13,424 crore|
AdvertisementSource: Trendlyne, company reports
The Adani Group has some distance to cover before it joins the coveted club of companies with a valuation of trillion dollars. Only time will tell if it manages to hit the trillion-dollar milestone or not.
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