The country's dash to a $3-trillion market cap is more a case of teamwork, than a few members doing most of the heavy lifting. Sample this: The share of top 100 companies to India's total market cap (BSE-listed companies' m-cap) is 67.3 per cent currently, less than what it has been when the nation hit previous milestones, such as $1 trillion, $1.5 trillion in 2007 or $2.5 trillion more recently in December 2020. In 2007, when India's m-cap topped the $1-trillion mark for the first time, the top 100 companies accounted for three-fourths of the total m-cap; at $1.5 trillion, the share was almost 80 per cent.
The combined dividend payout by early-bird companies -- those that have declared their results for FY21 -- is up 8.9 per cent, lower than the 21.9 per cent rise in in FY20 but ahead of the underlying growth in India Inc business last year. Combined net sales of these early birds were down 1.8 per cent last financial year while net profit was up 27.3 per cent in FY21. Some top companies that have stepped up dividend payout in FY21 include Hindustan Unilever, Indus Towers, Tata Steel, Ultratech Cement, Larsen & Toubro, Dabur, Asian Paints, and UPL. In contrast, banks have skipped dividends under an RBI diktat while companies such as Marico, TCS, Maruti Suzuki, and Godrej Consumer are paying lower dividends for FY21.
Thanks to a continued rise in the market capitalisation of the Adani Group companies, its promoter Gautam Adani is now the second richest Asian and fourteenth richest businessman in the world with a networth of $66.5 billion. Reliance Industries promoter Mukesh Ambani remains the wealthiest businessman in Asia with a networth of around $76.5 billion, according to Bloomberg data. The six Adani Group companies had combined market capitalisation of Rs 8.36 trillion as on Thursday, against Reliance Industries' market capitalisation of Rs 12.6 trillion. Adani Green tops the charts in the group with m-cap with Rs 1.99 trillion.
Thirteen companies have joined the Rs 1-trillion-plus market capitalisation club this year, so far. This even as the benchmark Sensex has gained less than 3 per cent on a year-to-date basis, underscoring the bullish undercurrent in the broader market. The trend shows a harsh second wave of Covid-19, subsequent lockdowns, and hit to the economic activity has made little dent into India Inc or shareholders' wealth. At the start of the year, there were 29 companies with a market value of more than Rs 1 trillion.
Historically, Tata Steel has always been among the biggest companies in the group in terms of m-cap, revenue, and profit but its fortunes began to decline after 2010 due to a sharp decline in the profitability of its European operations that it had acquired in 2007. The company was hit by a sharp rise in its debt level after this acquisition. First, it lost out to Tata Motors in terms of revenue in FY11 and then in March 2015, Titan beat it to become the third-biggest firm in the group in terms of m-cap. In FY20, TCS reported higher revenue and Tata Steel had become the third biggest company in that terms.
The group companies now lead the market capitalisation league table in sectors such as ports, power generation, gas distribution and transmission, and power transmission and distribution, ahead of incumbents in both public and private sector. This has Gautam Adani family the second wealthiest in business in India.
Overall, Tata Steel becomes the seventh non-financial firm, including four oil PSUs to report quarterly revenues of Rs 50,000 crore.
In 2020-21, Indian firms offered to buy back shares worth Rs 39,295 crore, or 97% more than Rs 19,972 cr proposed in the previous financial year.
Covid-19, US yields, dollar to weigh on equity flows in the near term.
The 30-share bluechip index is rebalanced on a semi-annual basis with next rejig slated for June 18.
Earnings growth in the early-bird sample has been driven by banks and iron & steel companies.
While the stocks met various other inclusion parameters, there were fears they may still get disqualified given the sharp run up in their stock prices.
However, experts caution that investors should not expect the big returns they got from the sector between March and September 2020.
Together with its share buyback worth Rs 16,000 crore completed in January this year, TCS shareholders will receive a record Rs 30,250 crore from their company in FY21.
The listing day gain-to-loss ratio for FY21 was 71 per cent, the highest since FY17, when it was 85 per cent.
The earnings are, however, expected to be down around 2 per cent on a sequential basis due to pent-up demand getting exhausted and the adverse impact of rising metals and energy prices on consumer goods and manufacturing companies.
The finance ministry said the sharp inflows last fiscal were due to the government's policy initiatives and economic recovery.
'It won't help being complacent about the momentum and valuations of equities that currently exist.'
India Inc's cash pile was up 13.8 per cent last fiscal year, thanks to a combination of higher profits in sectors such as IT and fund raising by top companies such a Reliance Industries, Bharti Airtel and Tata Motors, among others.
Jhunjhunwala, one of India's well-known individual investors, was speaking at the India Economic Conclave organised by the Times Network. He said he won't rule out 5-10 times gains in state-owned banks over the next five years. Shares of PSBs have been on a tear this year. The Nifty PSB index is up 20 per cent so far this year.
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