Modi factor: Number of billion dollar babies in Indian markets up 48% in a yr

The number of companies with a billion dollar market capitalisation in India witnessed a whopping 48 percent jump over the last year as investors pumped money into equity assets, betting on the prime ministership of Narendra Modi. The BJP announced the candidature of Modi on 14 September 2013, almost a year ago.

As of 19 August 2014, India has 200 such companies as against 135 a year ago, up by 65 ( see table here ). Of the 65 companies, 38 joined the bandwagon in 2014.

During the one year period, the benchmark stock indices Sensex and Nifty gained 44.32 percent and 45.85 percent, respectively. A 3.88 percent appreciation of the rupee against the dollar also contributed to the rise.

Foreign institutional investors, the major drivers of the rally, pumped in $21 billion (Rs 1.28 lakh crore) tobuy Indian equities in the past year. At the same time, domestic institutions net sold equities worth Rs 6,636 crore.

The notable players among these 65 new entrants to the elite list include Suzlon Energy, TVS Motor Company, Arvind, Balkrishna Industries, Gujarat Pipavav Port, Voltas, IRB Infrastructure, Ashok Leyland, Indian Hotels and Bharat Forge.

Suzlon’s market capitalization increased close to five-fold from just $220 million to $1.04 billion during the past one year. TVS’s market cap has risen from $230 million to $1.42 billion.

Meanwhile, Aurobindo Pharmaceuticals surged to $3.69 billion from $850 million. Bharat Forge has also seen its market cap soaring to $2.93 billion now from a year ago $810 million.

In the past one year, combined market worth of these 65 companies more than doubled – increased by 121 percent to be exact – to $95.5 billion from $43.13 billion while the total worth of 200 billion dollar firms rose 58 percent or $477 billion from $826 billion to $1.3 trillion.

During the period, total market capitalisation of all listed entities on the BSE increased 54 percent to $1.5 trillion from $947 billion.

Software major TCS with $78.71 billion market cap tops the list of billion dollar market cap club. Its market cap rose 43 percent from $55.12 billion in one year. This is followed by ONGC with $61.36 billion market cap which rose 73 percent in the past one year. At $53.76 billion, Reliance Industries is ranked third.