By Yoosef KP
With benchmark indices hitting new highs, the quantity of firms with a market place capitalisation of Rs 1 lakh crore has also surged. On Friday, Bajaj Auto and Tech Mahindra entered the elite club, taking the total quantity of such firms to 33 from 20 at the starting of FY21. These major 33 firms represent more than half or 55% of the Nifty500 market place capitalisation.
On Friday, Tech Mahindra became the fifth IT firm possessing a market place capitalisation of Rs 1 lakh crore. The major 5 application firms — TCS, Infosys, HCL Technologies, Wipro and Tech Mahindra — have a cumulative market place valuation of Rs 23.5 lakh crore (Friday’s closing rates) with the sector possessing the highest quantity of representatives just after financials.
Analysts anticipate IT firms to report robust numbers in the seasonally weak October-December quarter, led by ramp-up of massive offers, larger digital spending and investments in nextgen competencies. According to Kotak Institutional Equities, “We expect the Indian IT industry to grow in double digits in FY2022E with select large players growing up to 12-13% driven by market share gains, accelerated transformation spending and cloud-driven opportunities.” The brokerage prefers Infosys and Tech Mahindra as their major picks and added HCL Tech and Wipro are also fascinating.
The Nifty50 has gained 67% so far in FY21 — its quickest rally considering that FY10. While foreign portfolio investors shopped equities worth $30.4 billion in FY21 so far, domestic institutional investors (DIIs) remained net sellers to the tune of $15.9 billion, Bloomberg information showed. “Unlike the FY10 rally where DIIs also contributed to positive flows along with the high level of FPI inflows, the current rally has seen consistently opposite flows from FPIs and DIIs. Nevertheless, MFs did contribute to outflows during FY10 and, overall, the DIIs contributed positively,” ICICI Securities mentioned in a technique note on Friday, adding that more rapidly than anticipated pickup in aggregate demand going ahead could make it a consensus purchase for each FPIs and DIIs thereby additional fuelling the bull market place rally.
The market place capitalisation of Nifty 500 firms, which accounted for almost 90% of the NSE’s market place capitalisation and about 98% of the total turnover has risen by 70.9% to Rs 185.1 lakh crore in FY21. While the market place capitalisation of Adani Green Energy jumped more than six-fold to Rs 1.59 lakh crore in FY21, Bajaj Finance, HCL Technologies, Wipro, Adani Ports & SEZ and Infosys also saw their market place valuation doubling throughout the identical period.