When we launched, the Next 500 last year, the idea was to start a conversation on one of India Inc.’s most neglected pockets: midsize companies. Midsize companies must be made a part of the mainstream as they have a disproportionate impact on critical metrics, such as job creation and the overall competitiveness of the economy. In its second edition, the Next 500 continues that mission. Senior editor Rajiv Bhuva, who anchors the list, says companies across sectors had a tough year. Dividend growth, which is one of the more attractive features of the midsize segment, also disappointed investors. Notwithstanding those challenges, a fifth of the companies from last year’s list outperformed the rest and qualified for the big league: the Fortune India 500. Rajiv sliced and diced a huge amount of data to unearth top performers on a wide array of parameters, including the stocks that you should bet on if you are an investor. The analysis starts on page 78. Two companies from the list make for stories of great fortitude against odds. Praj Industries, led by a CEO who says “patriotism” is his main motivation, is ready with a technology to make ethanol from agri-waste, which it claims can help the country stop oil imports altogether. That’s a heck of a claim, given we currently import 78% of our crude oil needs. We travelled to Praj’s R&D campus off Pune and came away impressed. Read that story on page 82. Then there’s the engineering and design company Tata Elxsi (page 90), one of the most obscure firms within the Tata empire. In its 27-year existence, Tata Elxsi has lived in the shadows of big brother TCS; its market cap is less than 1% of the combined market cap of the Tatas’ 14 listed companies. But in the past three years, its stock has jumped some 900%. The company is being rewarded for its sharp focus on industrial design in a country that has no culture of design thinking. Its clients—from Jaguar Land Rover to Bosch—would agree. Outside of the Next 500, There is a story on the growing importance of India for Diesel, the iconic denim brand that went through a big reboot a couple of years ago (page 62).