Private lender, pharma major, top bottler: Among 15 that joined elite ranks
Read this | Tata, Vedanta, other business groups join the market upswing The analysis is based on data from the Association of Mutual Funds in India (Amfi), which classifies stocks based on guidelines from the Securities and Exchange Board of India issued in 2017. The latest categorization is derived from the average market capitalization of listed companies during the six months ended 30 June 2024.
Concurrently, 20 large-cap stocks from 2017 have slid into the mid-cap category, including YES Bank, Vodafone Idea, ACC, NMDC, and Hindustan Petroleum Corp. Ltd, while five others have been downgraded to small-cap, such as Vakrangee.Rea Between fiscal years 2017 and 2024, the collective market capitalization of the 15 firms that moved up the ranks to large-cap surged from ₹2.1 trillion to an impressive ₹19.6 trillion.
Leading this surge are Adani Enterprises, Varun Beverages, Indian Overseas Bank, and Trent, whose market values skyrocketed by 30.5, 23.2, 17.3, and 16 times, respectively, over this period. However, this meteoric rise has sparked concerns about the sustainability and justification of these valuations, prompting a more cautious market outlook.
And this | Amid FII selling, retail investors again prop up Indian market Market analysts are concerned that many of these companies are now trading at valuations that significantly exceed their historical price-to-earnings (P-E) ratios. For instance, Adani Power, Jindal Steel, JSW Energy, and Tata Power are trading at premiums of 36%, 43%, 133%, and 62% to their seven-year median PE ratios, respectively.
This suggests that market sentiment may be overshadowing the underlying financial realities. Anand K Rathi, co-founder of MIRA Money, emphasizes that the sharp increase
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