Companies with more than ₹1 lakh crore market capitalisation (m-cap) have gone up by five in 2022, notwithstanding the muted gains in the benchmark BSE S&P Sensex, a report by Business Standard stated. There are 54 companies with an m-cap of ₹1 trillion or more, up from 49 at the end of 2021, it added. These include Bajaj Auto, Siemens, Britannia, and Ambuja Cements, among others.
However, the year 2022 was pretty volatile for the equity markets due to monetary tightening, fears of global recession, and the crisis arising out of a Russia-Ukraine stand-off. Runaway inflation and China’s Covid woes put equities through the wringer, noted the report.
Despite that, India managed to stave off a big correction, notwithstanding record overseas outflows, as a result of domestic liquidity support and relatively better economic prospects, said BS.
The gains of Indian equity benchmarks were, however, muted compared to last year. In 2021, the Sensex gained 22 percent. So far this year, the Sensex has risen around 6 percent.
Analysts attribute the rise in the trillion club during a year of muted returns as a sign of gains in equity markets being lopsided, noted BS.
“The rally is not broad-based. It is concentrated in a few hundred stocks. Young investors who have thronged the equity markets of late buy into whatever is rallying,” said Chokkalingam G, founder, Equinomics Research & Advisory. Some stocks gained due to a rally in their sectors, he added.
The six state-owned companies in the trillion club in 2021 have held on to their positions, said the market daily. Adani Group has the maximum number of companies in the trillion club at five, followed by Tata Group at four, it further informed. Meanwhile, HDFC Bank added ₹96,936 crore to its m-cap and Hindustan Unilever added ₹84,197 crore.
However, Tata Consultancy Services, Infosys, Wipro, and HCLTech saw a dip in their m-cap, it noted.
Analysts told BS that the expansion of the trillion club will depend upon whether gains in equity markets are broad-based — or not.
“If this skewed performance continues, there will be more m-cap companies entering the trillion club,” added Chokkaliingam.