- Top 10 list is based in terms of market capitalization after the government proposed a hike in tax on tobacco and cigarettes.
- In the last 2 trading sessions, investors lost over ₹33,000 crores in market capitalization – the biggest 2-day fall witnessed in 18 months.
The new tax reforms rolled out recently may be useful in the long run but for now, it has backfired in the short run. ITC slipped from the list of India’s most valued companies in terms of market capitalization.
With a market cap of ₹ 2.57 trillion, our FMCG conglomerate ITC now ranks 11th on the list. Bharti Airtel and State Bank of India surpassed ITC with market cp of approx. ₹ 2.74 trillion & ₹ 2.68 respectively.
“The tax increase in the Union Budget comes as a negative surprise and is likely to affect earnings growth in the near term. Based on our workings, the hike in cigarette duties is likely to result in a weighted average consumer price increase of 6-7% for ITC, with price increases being higher at ~8% in 64mm cigarettes,” said Emkay Research in a note to its investors.
Finance minister Nirmala Sitharaman proposed a 10% hike in excise duty on cigarettes across lengths. Analysts commented that valuations have corrected but earnings visibility remains weak given the further increase in cigarette taxes.
Here are India’s most valued companies:
- Reliance Industries – ₹8.77 trillion.
- Tata Consultancy Services – ₹8.12 trillion.
- HDFC Bank – ₹6.57 trillion.
- HUL – ₹4.49 trillion
- HDFC Ltd. – ₹3.92 trillion.
- Infosys Ltd – ₹3.32 trillion.
- ICICI Bank Ltd – ₹3.26 trillion.
- Kotak Mahindra Bank Ltd – ₹3.15 trillion.
- Bharti Airtel – ₹2.74 trillion
- State Bank of India – ₹2.68 trillion.
Market capitalization is a company’s total dollar market value known by its outstanding share of stock. To calculate market cap, the company’s outstanding shares are multiplied by the present market price of each share.
It’s a very useful figure for the investors to decide the size of a company as against the method of knowing it from total sales or asset figures.
While the new tax reforms affected ITC – a leader in tobacco products, it will be interesting to see the movements of companies on the list of most valued companies.
