The banking, financial services and insurance (BFSI) sector appears to be on a roll on the equity markets, if one goes by their overwhelming presence in the top deck of the BT500 rankings this year. The BT500 is the annual ranking of India’s most valuable companies based on average market capitalisation. The period under consideration for the rankings was October 1, 2020 to September 30, 2021. As many as six of the top 10 in this year’s BT500 are from the BFSI sector, demonstrating their clout in the equity markets.
HDFC Bank, the most valued banking institution, figures at No.3, with HDFC, ICICI Bank, Kotak Mahindra Bank, Bajaj Finance and State Bank of India comprising ranks 6 to 10 in that order. The Sanjiv Bajaj-run Bajaj Finance enters the top 10 for the first time at No.9, while SBI is back on the top 10 after a year’s gap in tenth position. The BFSI sector, with 85 companies, has the highest representation in the BT500, and also contributes the maximum to the market capitalisation.
IT bellwether Infosys, at No.4 this year, is back in the top 5 after a gap of five years. Two companies—Reliance Industries and TCS—are the only ones with market cap of over ₹10 lakh crore. The top 3, RIL, TCS and HDFC Bank, retain their rankings from last year and are the three most valuable companies on the list.
In the top 50, four Adani companies were the fastest growing: Adani Total Gas (446 per cent); Adani Enterprises (404 per cent), Adani Green Energy (315 per cent) and Adani Transmission (238 per cent). This year saw 28 debutants, with the best performance being that of Gland Pharma at rank 81, followed by Macrotech Developers at 112th position. In line with the surge in the equity markets over the past year, with several new investors entering and benchmark indices hitting new highs, the aggregate market wealth of the BT500 has shot up 43.4 per cent during the period in question, with the S&P BSE Sensex gaining 55.3 per cent in the same period.
“I think our market is maturing in terms of both breadth and depth; so from a market where there were hardly a few large companies, now we have several companies with large market capitalisation in billions of dollars,” says Nirmal Jain, Chairman, IIFL.
“A few years ago, we saw for the first time, insurance companies and asset management companies went public. Now e-commerce companies are going public. They are not making profits, but have a huge customer franchise and, therefore, valuations and so are going public,” explains Jain, whose investment banking arm is one of the merchant bankers of PB Fintech (PolicyBazaar) and MobiKwik among others.
While corporate leaders across the board are bullish on the prospects of the economy and, consequently their companies as evidenced by the BT Business Confidence Index hitting its 10-quarter high in the September quarter, there are areas of concern as well, with inflation and the rising commodity prices threatening to dampen the spirits of the corporate sector. The next year’s ranking will have the answer to how the BT500 universe navigates these challenges in the coming days.
(The BT500 special issue of Business Today magazine is out now on stands)