From Hero MotoCorp to BPCL, Rs 1 trillion mcap club wears a new look

The surge in companies with a trillion-dollar market cap is attributed to the market's overall gains

The robust returns logged by the market this year have led to the entry of 23 companies into the Rs 1 trillion club on the bourses in 2024. This year, 96 companies commanded a market capitalisation (mcap) of Rs 1 trillion or more, compared to 73 at the end of 2023.
 

Companies that have entered the Rs 1 trillion club in 2024 include tech firm ABB, petroleum refiner BPCL, two-wheeler major Hero MotoCorp, peer TVS Motor, and electrical equipment maker Havells India. All the firms in the trillion club last year managed to retain their position except for Shree Cement. Currently, the cement maker has a mcap of Rs 99,288 crore.
 

 

The surge in companies in the trillion mcap club is attributed to the market's overall gains. Despite the recent turbulence due to election uncertainties in the last two months, the Nifty has gained 8 per cent in 2024.
 

Strong domestic investor buying and an improved economic growth outlook propelled the market despite outflows from overseas funds. So far, domestic institutional investors have been net buyers (buying minus selling) of shares worth Rs 2.14 trillion, against net sellers of shares worth Rs 26,428 crore.
 

"Equity markets have never attracted domestic investors like this, and it (inflow) continues. Most of these new investors chase rallying stocks, so they lapped up PSU (public sector undertaking) stocks," said Chokkalingam G, founder, market research firm Equinomics.
 

The re-entry of BHEL, BPCL, IOB, Canara Bank, and Union Bank of India has strengthened the presence of PSUs in the Rs 1 trillion club. On a year-to-date basis (YTD), the BSE PSU index has gained 37.5 per cent against the Sensex's gain of 6.8 per cent.
 

"The PSU theme plays every three to five years. This time it has moved much beyond the historical trend and the expectation and the kind of upgrades in valuation in the PSU pack are unprecedented. PSU performance has improved, and they rewarded their shareholders through handsome dividends and buybacks," said Chokkalingam.
 

Most of the companies in the trillion mcap club are government-owned, and are followed by the Adani group and the Tata group, both having seven group companies in the list each. The companies in the trillion club constitute 62 per cent of the overall mcap of listed companies in BSE.
 

"Index funds have become popular, and a lot of money goes into index-based stocks and valuations, and the contribution of these firms to the overall market capitalisation keeps expanding," said Deepak Jasani, head of retail research, financial services firm HDFC Securities.
 

In the future, the trillion mcap club is likely to expand further as market experts believe the rally hasn't peaked yet.
 

"As long as the markets continue to do well, more companies will get added to the trillion club. Markets have priced in a lot of negative news in the last 18 months, and after a period of correction, they are rising again. There is no immediate fear of a sharp fall. Markets may consolidate a bit, but we haven't seen the top of this move yet," said Jasani.