They are entrepreneurial, ambitious and unfeasibly rich, yet this year’s entrants to India’s billionaire club are hardly known even in their home country.

That, however, is about to change. The world’s investment bankers will take note, will know how the new boys struck it rich on the back of the bull run on the Bombay stock market and will be factoring-in the surging Indian economy. Fame is about to follow mega-fortune.

In the past 12 months, the number of dollar billionaires in India has more than doubled, from 23 to 48, according to a survey published yesterday. In 1999, when Business Standard, the financial newspaper, started to keep count, there were just three.

A quarter of the new super-rich have made their fortune on a flood of initial public offerings in India in an unparalleled stock market-driven creation of wealth. In India the family business still rules and equity is in the hands of a few, so, when it comes to going public, the owners get very rich, very quickly.

They include G. M. Rao, a mechanical engineer by profession, who is worth $5.3 billion (£2.6 billion) after bringing his infrastructure development company to market last year. He is India’s tenth-richest man.

The property boom in India has propelled many towards the top of the list, including Ravi Puravankara, whose company has a big presence in Bombay and Bangalore, and Pradeep Jain, who eschewed the family aluminium kitchenware business to build IT parks, hotels, shopping centres and Chinese-style special economic zones.

While part of India’s growth story is explained by the 40 per cent year-on-year rise in the Sensex, Bombay’s benchmark index of 30 leading shares, the full reflection of the country’s mounting self-belief is in the number of companies successfully coming to market. In the past 11 months there were 95 initial public offerings (IPOs) that raised a total of $7.9 billion, according to Prime Database, an Indian capital markets research company. In the previous year there were 73 IPOs, raising $4.4 billion, and in the 12 months before that 53 IPOs raised $2.3 billion.

The entire amount raised on the domestic capital markets in 1998 was $69 million, which shows how far India’s financial markets have come in the past decade after economic reforms implemented in 1991.

“There was such a long period when the markets were dead that there is all this pent-up activity,” Privthi Haldea, managing director of Prime Database, said. “This is not asset-based wealth but a market perception and it is unprecedented in India. It is real wealth because it is based on market values, although markets do tank for various reasons. There are hundreds of IPOs in the pipeline so, barring a disaster, we are going to see more of this.”

Mr Haldea said there are about 400 companies waiting to float, with the potential to raise $45 billion, although it is likely that only 125 to 150 will make it to market next year, raising between $15 billion and $17 billion.

With such mind-boggling statistics flying around, the tone of media coverage in India is suitably bombastic. A story on the front page of the Hindustan Times last week revealed how two brothers, Rajesh and Gautam Adani, had made $4 billion after the stock market debut of Mundra Port, their Gujarat-based port-to-power conglomerate.

Given that the Sensex is trading on a forward price-to-earnings multiple of 20 times, there is a risk of overexuberance, but most experts believe that the upward trend is sustainable, particularly if economic growth has been underestimated, as some believe.

Andrew Holland, managing director of Merrill Lynch India, said: “It is not unreasonable to say it is sustainable because the growth is not in any one particular sector, like the tech bubble of 2000. It is across many different industries and it’s domestically driven.”

All of which means that by this time next year, there are likely to be scores of new names to add to India’s burgeoning billionaire club.

The big players

Mukesh Ambani, oil and petrochemicals, $37bn
Anil Ambani, telecoms and finance, $24.6bn
K. P. Singh, property, $23bn
Sunil Mittal, telecoms, $18.6bn
Azim Premji, IT, $13.8bn
Anil Agarwal, metals, $12bn
Ramesh Chandra, property, $7.6bn
Kumar Birla, diversified, $6.9bn
Tulsir Tanti, wind energy, $6.5bn
G. M. Rao, infrastructure, $5.3bn

Source: Business Standard, based on average share prices in August 2007

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