As a result, the HerfindahlHirschman Index (HHI), a common measure of market concentration in an industry, reached a new high in FY24 in industries such as telecom, airlines, cement, steel, and tyres.
In a Business Standard analysis, paints was the only industry that reported a decline in the HHI or a rise in competitive intensity due to market share gains by new players such as JSW Paints.
Market concentration in paints is expected to decline further with the entry of the AV Birla group.
The numbers indicate a steady rise in the revenue share of the top two firms across industries in the last 10 years, leading to a rise in HHI scores. For example, in airlines the revenue share of the top two players increased from 53.1 per cent in FY14 to 92.6 per cent in FY23.
In telecom, the rise was from 46.5 per cent in FY15 to 71.9 per cent in FY24. In steel it rose from 44.5 per cent to 57.6 per cent in the period.
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