MUMBAI: As Indian markets scaled new highs this financial year, the market capitalisation (m-cap) of 11 companies crossed the Rs 1 trillion-mark over the past seven months, joining the club with 46 others. This is a rise of 19% over FY23.
These 11 firms include Adani Power, DLF, Hindustan Aeronautics, Jio Financial Services, Varun Beverages, IndusInd Bank, Hindalco Industries, Zomato, Godrej Consumer Products, Bharat Electronics and Cipla.
Out of these, five companies – Adani Power, DLF, Hindalco Industries, Zomato and Godrej Consumer Products – have rejoined the group.
Two companies – Vedanta and Adani Energy Solutions – exited this club, bringing down the final number to 57.
During the same period, the Sensex and Nifty 50 returned 10% and 12%, respectively in FY24 while the BSE MidCap and BSE SmallCap returned 35% and 42%, respectively.
Adani Power, the power subsidiary of Adani Group, saw its m-cap trickle down to Rs 74,000 crore by March 31 after US short seller Hindenburg Research accused the group of fraud and stock manipulation in a report in January. However, it recovered and jumped 105.3% to Rs 1.52 trillion.
Among the entrants, Adani Power’s m-cap was the highest at Rs 1.52 trillion, DLF at Rs 1.47 trillion and Hindustan Aeronautics with a m-cap of 1.37 trillion.
Jio Financial Services, which listed on the Indian markets on August 21, climbed to the Rs 1 trillion-mark on the very same day. Today its m-cap stands at Rs 1.36 trillion.
Typically, firms with m-cap of more than Rs 1 trillion are considered large-cap stocks. “In case of large-cap companies, the risk-reward equation is quite attractive and if one has to play the investment story from a long-term perspective, large-caps are better options. This is why, we see a lot more companies joining this club and will continue to do so going ahead,” said Pankaj Pandey, head, research at ICICI Direct.
As of March 31 2023, 48 companies had m-cap of Rs 1 trillion and above, which upon the addition of the new 11 members took the total number to 59.
Pandey believes that more companies will join the Rs 1 trillion m-cap group betting on India’s growth story since India is one of the few markets where the five-to-seven year growth looks quite robust with sound macros and should get reflected in top Tier-1 companies because these companies are expected to deliver better than the GDP growth rate.
The top 10 companies by m-cap are Reliance Industries with an m-cap of Rs 15.81 trillion, followed by Tata Consultancy Services at Rs 12.37 trillion and HDFC Bank at Rs 11.32 trillion. The total m-cap on the BSE rose by Rs 62.3 trillion or 24% to Rs 320.5 trillion since March 31, 2023.
Source: The Financial Express