Billion-dollar club- 49 firms exit, 23 make entry

Billion-dollar club: 49 firms exit, 23 make entry

By Siddhant Mishra and Kishor Kadam

Information technology firms accounted for a fifth of the companies that exited the billion-dollar market cap club in FY23. On the other hand, banks/financials and capital goods were investors’ favourite among those that entered the illustrious club.

The rupee, it is worth noting, depreciated 8.43% against the greenback during the financial year. It slid from 75.79 to a dollar in FY22 to 82.18 as of FY23.

Tanla Platforms, which commanded $2.74 billion in market capitalisation as of FY22, fell to $860 million, showing a 65.8% drop in its share price — from Rs 1,527 as of March 2022 to Rs 523 in March 2023. Brightcom Group, which had $2.59 billion in m-cap, fell to $360 million, translating to an 85% nosedive in its stock price —from Rs 97.40 to Rs 14.64.

The 49 entities that exited the club saw their combined market cap drop by 37.9% in rupee terms, and 42.8% in dollar terms. The 23 firms that made their entry into the league saw their combined market value rise 77.4% in rupee terms and 63.6% in dollar terms, according to data by Capitaline.

“In the last one year, the Nasdaq has shed close to 40%, and FIIs have been net sellers. This has affected mid and smallcaps, and the stocks have lost value even in dollar terms,” said Kranthi Bathini, director (equity strategy), WealthMills Securities.

According to analysts, the banking and financials spaces have been in good shape thanks to cleaner balance sheets, NIM expansion, and strong credit growth in 2022 — leading to investor confidence.

At the same time, the capital goods and infra spaces have seen a pick-up in activity after the reopening, with healthy order books and demand from overseas giving an opportunity to Indian players.

Bathini said stocks that have seen their value rise are from sectors with strong earnings visibility. Rail Vikas and Mazagaon Dock went up from $900 million and $640 million, respectively, to $1.74 billion and $1.63 billion. Among notable names that exited the club were TV18 Broadcast and UTI AMC, which fell from $1.68 billion and $1.67 million, respectively, to $600 million and $990 million.