Mind the Gap

The way capiTalism Tackles The unhealThy Trend of wealTh concenTraTion, made worse by The pandemic, will decide iTs fuTure

- Udayan Mukherjee

APL Apollo is India’s largest manufacturer of structured steel tubes. Like most companies, it was hit hard by the first wave of the pandemic, with sales halving and profits being wiped out completely in the April-June 2020 quarter. But, it was a blip. What followed was a relentless cycle of market share gain, so much so that the company will end FY22 with 55 per cent share of the steel tubes market, up from 40 per cent in FY20. Its operating cash flows have doubled during this period. Many of its competitors, particularly in the unorganised sector, have either shut shop or curtailed operations significantly. Such a sharp rise in market share in just two years is nothing short of staggering. Yet, APL is not alone. Strong leaders in practically every business sector have increased market share during the last one year, at the expense of weaker competitors with less access to capital, technology or labour. Bajaj Finance in the NBFC space, Polycab in cables and Asian Paints in paints are just a few examples. This trend, of concentration of market share, profitability and shareholder returns, is something which was already underway in India but got hugely accelerated by the Covid disruption.