Indian companies with a market capitalisation of over Rs 1 lakh crore have grown from just one in FY02 to 81 in FY24. These companies now account for nearly 60 per cent of total market capitalisation, up from less than 20 per cent two decades ago
The number of Indian companies with a market capitalisation of over Rs 1 lakh crore has grown to 81 today from just one back in the fiscal year 2001-02 (FY02), a recent report by the National Stock Exchange (NSE) revealed. By FY10, this number grew to 14 companies, with a combined market value of Rs 21.2 lakh crore.
The Great Recession of 2008 resulted in a temporary dip in the market capitalisation but global liquidity infusion post the crisis, implementation of key reforms including easier Foreign Direct Investment (FDI) limits and fuel price deregulation over the next few years, economic recovery and improvement political stability expectations drove markets higher in 2012 and 2013, the exchange said. As a result, the number of companies with a market cap over Rs 1 lakh crore grew to 22 in FY15, taking the combined market capitalisation of such companies to Rs 43.8 lakh crore.
By FY19, this number grew to 30 companies with a combined value of Rs 73 lakh crore, making up about 48.8 per cent of the total market capitalisation of companies listed on the NSE. The COVID-19 pandemic disrupted markets in FY20, reducing the number of such companies to 20, hitting a combined market capitalisation of Rs 51.8 lakh crore.
However, post-pandemic, fiscal and monetary policy measures, coupled with strong economic recovery and rising domestic participation, facilitated a strong recovery, with the number of such companies reaching 81 in FY24 out of the total listed space of 2,439 companies then, said the stock exchange. The combined value of these companies reached Rs 234 lakh crore, which is more than 60 per cent of the total market capitalisation of all the NSE-listed companies.
“This increase over the last two decades is a reflection of India’s strong economic fundamentals, implementation of several crucial reforms, surplus global liquidity after the crisis and a steadily growing investor base,” said NSE.
The report highlighted that the market capitalisation of the top 10 companies grew nearly 30 times over the past two decades. In FY04, it was Rs 3 lakh crore, which grew sevenfold to Rs 22 lakh crore by FY14. Over the next decade, it grow four times to Rs 89 lakh crore by FY24.
“This sharp increase was an outcome of continued market reforms, strong economic growth trajectory, and the growing confidence of investors in Indian capital markets,” said NSE.
Reliance Industries (RIL) maintained the top spot over these 20 years, during which its market capitalisation ballooned to Rs 20 lakh crore in FY24 from just Rs 75,132 crore in FY04, growing more than 26 times.
This translates into an annualised return of over 17 per cent, which is higher than the annualised return of 13.5 per cent generated by the Nifty 50 Index during this period.
The top 10 list has seen major overhauls over the years. According to the report, in FY04 five companies that were in the top 10 didn’t make it back in FY14, though two of them returned by FY24.
New players like Tata Consultancy Services (TCS), ONGC, Coal India, HDFC, and HDFC Bank entered the top 10 in FY14, but some, like ONGC and Coal India, dropped out by FY24.
NSE also noted that the number of government-owned companies in the top 10 shrunk from two in FY04 to just one in FY24. However, companies like RIL, Infosys, State Bank of India (SBI), ITC, and ICICI Bank have remained consistently in the top 10 across the previous two decades.