~1-trn m-cap club nears half-century
19 companies join in 2021, taking the total to 47
The number of companies with market capitalisation (m-cap) of ~1 trillion or more has risen to 47 from 28 last year. Companies that have entered the ~1trillion club in 2021 include Adani Enterprises, BPCL, Dabur, Godrej Consumer, and JSW. All the firms in the trillion club last year have managed to retain their position.
Market experts said this was a natural consequence of the sustained gains in the market. Renewed optimism about the domestic economic outlook following an improvement in high-frequency indicators, enthusiastic participation by domestic institutional and retail investors, and monetary easing by central banks of developed countries have led to gains.
Participation of public sector undertakings (PSUS) in the ~1-trillion club has strengthened with the re-entry of NTPC and BPCL, and the entry of Powergrid Corporation. On a year-todate basis (YTD), the BSE PSU index has gained 30.6 per cent against the Sensex’s gain of 17.5 per cent. State Bank of India (SBI) and ONGC, the other two PSU firms present in the club, have seen a gain in m-cap. SBI’S m-cap has risen 49 per cent and ONGC’S 24 per cent this year.
Analysts attributed the entry of PSU majors in the trillion club to investors looking for value beaten-down stocks.
“There has been bargain buying in PSU space,” said G Chokkalingam, founder, Equinomics. Some others said it was because of optimism about divestments. Sentiment in favour of renewables and monetisation of assets helped the NTPC and Powergrid stocks.
Ambareesh Baliga, an independent analyst, said: “Divestments in the last four years were through follow-on offers, and it had created some pressure in the stock prices.”
“Now there is talk of divestment favouring strategic investors, who are giving better valuations to PSU majors,” he added.
The Adani group has the maximum number of companies in the trillion club at five, followed by the Tata group (four).
TCS, Infosys, Reliance Industries, and Wipro saw a huge rise in their m-cap in absolute terms this year. TCS added ~2.8 trillion, Infosys ~2 trillion, Reliance Industries ~1.7 trillion, and Wipro 1.2 trillion.