Herfindahl-Hirschman Index (HHI)

Definition: Herfindahl-Hirschman Index is a measure which is used to determine the level of

competitiveness in any market. It is usually done before and after Mergers and Acquisitions
transactions. HHI ranges from 1 to 10,000.
Below 100 indicates that the industry is highly competitive.
Between 100 and 1500 indicates an unconcentrated industry.
Between 1500 and 2500 indicates a moderate concentration
Above 2500 indicates a high concentration.
Formula: HHI= S1^2+S2^2+S3^3+……..+Sn^2
Where, Sn is the percentage of market share of a firm operating in the industry.

Herfindahl-Hirschman Index

Square of
Company Net Sales (Rs. In Market
Market
Name cr.) Share
share
Indian Hotels 2,780.41 23.51142216 552.786972
EIH 1,543.24 13.04979019 170.2970239
Chalet Hotels 987.17 8.347607228 69.68254644
Mahindra
918.29 7.765151131 60.29757208
Holiday
India Tourism
349.96 2.959296398 8.757435174
D
Speciality
346.36 2.928854442 8.578188343
Rest
Oriental
345.42 2.920905709 8.531690161
Hotels
Taj GVK
316.87 2.679484083 7.179634952
Hotels
Lemon Tree
273.32 2.311220973 5.341742385
Hotel
Sayaji Hotels 218.25 1.845543602 3.406031187
Country Club 214.68 1.815355329 3.295514969
Kamat Hotels 192.39 1.626868882 2.646702361
Hotel Leela 154.34 1.305114316 1.703323379
Asian Hotel
148.84 1.258605772 1.584088489
(W)
The Byke
146.77 1.241101647 1.540333298
Hosp
Royal Orchid 112.6 0.952156745 0.906602467
 Asian Hotel
103.44 0.874698878 0.765098128
(E)
Viceroy
86.49 0.731368001 0.534899152
Hotels
TGB
79.75 0.674373894 0.454780148
Banquets
Mac Charles 78.24 0.661605184 0.43772142
Savera
71.87 0.607739834 0.369347705
Industries
Fomento
66.09 0.558863581 0.312328503
Resorts
Benares
59.68 0.504659987 0.254681703
Hotels
Sinclairs
45.75 0.386866528 0.149665711
Hotel
Jindal Hotels 38.03 0.321585444 0.103417198
Royale Manor 23.2 0.196181496 0.038487179
Phoenix Town 20.58 0.174026517 0.030285229
Dhanadai
11.22 0.094877431 0.009001727
Corp
Howard
10.65 0.090057454 0.008110345
Hotels
Sanghvi
10 0.08456099 0.007150561
Brands
Ras Resorts 9.17 0.077542428 0.006012828
Velan Hotels 6.35 0.053696229 0.002883285
Best Eastern 5.18 0.043802593 0.001918667
Cindrella
4.78 0.040420153 0.001633789
Hotel
Gujarat Hotels 3.7 0.031287566 0.000978912
Polo Hotels 1.64 0.013868002 0.000192321
Royal Orchid
2,041 17.25943921 297.8882417
Hotels
Club
Mahindra 918.29 7.765151131 60.29757208
Holidays
Vivanta 2.12 0.01792693 0.000321375

Total 11,825.78 1207.912238

Since the Herfindahl–Hirschman Index is 1207.912238, and it lies in the range of 100 to 1500
therefore, it can be concluded that the index indicates an unconcentrated industry.
 *Market Share= (Market Share of Individual firm/Total Market Share)*100

Sources: https://www.moneycontrol.com
https://in.finance.yahoo.com