- India’s largest conglomerate Reliance Industries Ltd (RIL) added to its market cap a whopping 2.49 trillion over the year. This was by far the largest market value added in a given year by a single entity.
It’s been a year of records getting shattered. With inflows from foreign and domestic investors flooding into Indian stocks, major Indian firms had a dream run that clocked huge market value gains in 2019.
India’s largest conglomerate Reliance Industries Ltd (RIL) added to its market cap a whopping 2.49 trillion over the year. This was by far the largest market value added in a given year by a single entity.
The previous high in market capitalization was back in 2017 when Reliance Industries finished the list adding around $2.3 trillion to its market capitalization.
The portfolio of Tata Consultancy Services added around 1 trillion to its market capitalization in 2019.
In fact, in the past two years alone, RIL has added nearly 4 trillion to the wealth of its shareholders.
Indian stock market sentiments took a turn for the better after a corporate tax cut for Indian firms was declared by the government. Stocks began in 2019, with market capitalization reaching around $12 trillion.
“Large-cap index performance has been improved by a strong performance of a few large-cap stocks and earnings upgrades for most stocks following the corporate tax cut announcement on September 20, 2019. By the way, on 31 December 2018 (10,863) and 19 September 2019 (10,705), the nifty-50 Index was at similar levels, which would mean that the full return on the market for CY2019 came after 19 September 2019, “said Kotak Institutional Securities Ltd in a customer note.
By comparison, in 2018, India’s total market capitalization dropped by about $6.28 trillion, as investors sold a significant number of stocks.
The mood in 2019, however, was not as vibrant as it was in 2017 when Indian stock markets added a whopping 46 trillion in market cap.
The Indian markets also owe most of this year’s gains to low-interest rates around the globe, driving investors into equity. Globally, the MSCI world index finished at a record high, with global stock market capitalization rising by 25.2 percent over $50 trillion. The majority of India’s stock market gains, however, come from smaller firms. All gains were compensated for by the top 13 market cap gainers in 2019. Some of the other top winners include HDFC Bank, which earned $1.19 trillion, while Bharti Airtel Ltd, ICICI Bank Ltd ($1.17 trillion).
“The strong performance of banks, diversified financials, and insurance reflects (1) the re-rating of multiple beaten-down banks on NPL peaks, the decline in slippage and loan-loss provisions, and the continued strong performance of ‘ retail ‘ banks,” Kotak said.
