BSE Market Capitalization Recoups Old Peak

On the 10th of January as the Nifty closed above the 18,000 mark, the overall market capitalization of the Bombay Stock Exchange crossed the Rs.274 trillion mark. Interestingly, this level was last seen on the day the Sensex peaked on 19th October.

However, after scaling that peak, the Sensex lost nearly 10% from the highs on concerns over valuations, interest rates and higher inflation. From the recent lows, the Sensex has recovered a full 7.5% but is still about 3% below the pervious peak levels of the index.

What explains this dichotomy? How has the BSE market cap crossed the previous peak when the Sensex is still about 3% below the old peak. The answer lies in the fact that this rally is actually coming from outside the index.

In the last few days, if you look at the number of companies on the BSE hitting upper circuit, there is a huge contribution coming from the mid-cap and the small cap stocks. These may not be able to match up with the index biggies in market cap but put together they can surely impact the market value accretion of the exchange.

The other factor is IPOs. In the last 3 months we saw several big ticket IPOs like Paytm, Nykaa and Star Health get listed on the bourses. Some of them may have lost value over listing but the fact remains that they are still adding to the market cap of the Bombay Stock Exchange from Ground Zero.

Just to put things in perspective, Rs.274 trillion roughly translates into a globally comparable market cap of $3.60 trillion. That puts the Bombay Stock Exchange among the 10 most valuable stock exchanges in the world in terms of market. In fact, its market cap is more than Germany and even Canada.

Who dominates the BSE market cap roster?

Here are some interesting facts to know about the BSE market cap story.

a) As of the close of trade on 11-January, the overall market cap of the BSE stands at Rs.274.7 trillion. This is of all the 5,000 listed companies on the BSE.

b) Out of the overall market cap of the BSE, Reliance Industries alone accounts for 6.05% of the entire BSE market cap while Reliance and TCS combined account for 11.32% of the total market cap of the BSE. That is quite a bit of concentration.

c) The top 10 stocks on the BSE by market cap are RIL, TCS, HDFC Bank, Infosys, Hindustan Unilever, ICICI Bank, HDFC, Bajaj Finance, SBI and Airtel. These 10 stocks include 5 financials and 2 IT players. These 10 stocks account for 28% of the overall BSE market capitalization.