Market Capitalization of Eight of India’s Top-10 Firms Plummets by ₹2 Lakh Crore; Reliance Industries Leads the Decline
Market Capitalization : In a significant downturn reflecting the broader bearish trend in the Indian stock market, eight of the top ten most valued domestic companies witnessed a combined market capitalization (mcap) erosion of ₹2,03,952.65 crore over the past week. Reliance Industries emerged as the most affected, contributing substantially to this decline.
Prolonged Market Downturn
The Indian equity benchmarks have been on a downward trajectory, with both the Sensex and Nifty indices extending their losses for the eighth consecutive day as of Friday. During these eight trading sessions, the BSE Sensex has plunged by 2,644.6 points, equating to a 3.36% drop, while the Nifty has slumped by 810 points, or 3.41%. This persistent decline underscores the prevailing negative sentiment among investors, influenced by global economic uncertainties and domestic factors.
Major Contributors to the Decline
The following table details the market capitalization losses of the eight companies:
| Company | Market Capitalization Loss (₹ Crore) | New Market Capitalization (₹ Crore) |
|---|---|---|
| Reliance Industries | 67,526.54 | 16,46,822.12 |
| Tata Consultancy Services (TCS) | 34,950.72 | 14,22,903.37 |
| HDFC Bank | 28,382.23 | 12,96,708.35 |
| ITC | 25,429.75 | 5,13,699.85 |
| Infosys | 19,287.32 | 7,70,786.76 |
| State Bank of India (SBI) | 13,431.55 | 6,44,357.57 |
| Hindustan Unilever | 10,714.14 | 5,44,647.00 |
| Bajaj Finance | 4,230.40 | 5,20,082.42 |
Reliance Industries, a conglomerate with diversified interests spanning petrochemicals, refining, oil, telecommunications, and retail, experienced the most significant erosion, with its market valuation decreasing by ₹67,526.54 crore, settling at ₹16,46,822.12 crore. This substantial decline reflects the company’s sensitivity to global oil price fluctuations and challenges in its telecom and retail segments.
Tata Consultancy Services (TCS), a leading IT services provider, saw its market capitalization shrink by ₹34,950.72 crore, bringing it down to ₹14,22,903.37 crore. The IT sector has been grappling with global economic headwinds, leading to cautious client spending and delayed project timelines.
HDFC Bank, one of India’s premier private sector banks, faced a reduction of ₹28,382.23 crore in its valuation, now standing at ₹12,96,708.35 crore. The banking sector’s performance has been influenced by concerns over asset quality and credit growth amid a challenging economic environment.
ITC, a diversified conglomerate with interests in FMCG, hotels, paperboards, and packaging, witnessed its market valuation decline by ₹25,429.75 crore to ₹5,13,699.85 crore. The company’s performance has been impacted by regulatory challenges in its core cigarette business and muted growth in its other segments.
Infosys, another major IT services firm, experienced a market cap reduction of ₹19,287.32 crore, now at ₹7,70,786.76 crore. Similar to TCS, Infosys has been navigating a tough global market with clients tightening their IT budgets.
State Bank of India (SBI), the country’s largest public sector bank, saw its valuation decrease by ₹13,431.55 crore to ₹6,44,357.57 crore. The bank’s exposure to stressed sectors and concerns over non-performing assets have weighed on investor sentiment.
Hindustan Unilever, a leading FMCG company, faced a market cap erosion of ₹10,714.14 crore, bringing it to ₹5,44,647 crore. The company has been dealing with input cost pressures and competitive intensity in the consumer goods space.
Bajaj Finance, a prominent non-banking financial company, saw its valuation dip by ₹4,230.4 crore to ₹5,20,082.42 crore. The NBFC sector has been under pressure due to liquidity constraints and asset quality concerns.
Notable Gainers
Contrary to the prevailing trend, Bharti Airtel and ICICI Bank emerged as gainers during this period.
- Bharti Airtel: The telecom giant’s market capitalization increased by ₹22,426.2 crore, reaching ₹9,78,631.54 crore. The company’s growth can be attributed to its expanding subscriber base and improved average revenue per user (ARPU), bolstered by increased data consumption and strategic investments in network infrastructure.
- ICICI Bank: This leading private sector bank saw its valuation rise by ₹1,182.57 crore, totaling ₹8,88,815.13 crore. ICICI Bank’s robust financial performance, characterized by healthy loan growth and improved asset quality, has instilled confidence among investors.
Financial Metrics Overview
Understanding the financial health of these corporations provides deeper insights into their market performance. Below is a summary of key financial ratios for the top 10 companies:
| Company | P/E Ratio | EPS (₹) | ROE (%) |
|---|---|---|---|
| Reliance Industries | 47.70 | 26.11 | 8.46 |
| Tata Consultancy Services (TCS) | 30.45 | 133.59 | 59.60 |
| HDFC Bank | 19.40 | 86.59 | 16.97 |
| Bharti Airtel | 122.35 | 13.50 | 5.56 |
| ICICI Bank | 19.54 | 64.12 |
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.