11 firms enter the Rs 1-trillion m-cap club

11 firms enter the Rs 1-trillion m-cap club

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.

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.