Nifty50 companies no more account for 50% of NSE market capitalisation

The sell-off in select largecaps and a record fund raising through primary offerings have dampened the dominance of Nifty50 companies in the overall market capitalisation. The share of top 50 companies relative to the NSE’s aggregate market valuation has slumped to 43% from the record 68% seen in April 2004, show data compiled from Bloomberg.

Historically, the lowest level was seen in early 2005 when the ratio stood at as low as 36%. These readings are hard to decipher in real-time, and harder to take advantage of, wrote DSP Asset Managers in its December edition of the DSP Netra. “Considering the large excess returns delivered by the non-largecap universe and the narrative that ‘domestic flows’ would not allow non-largecap universe to ‘fall’, it is not easy to use this rare occurrence to advantage”, the report said.

As of Thursday’s close, the combined market capitalisation of all listed companies on the NSE stood at ₹454.3 lakh crore. In comparison, the top 50 companies in the country boast a market capitalisation of ₹195.5 lakh crore.

While the Nifty50 companies together have lost a whopping ₹10.2 lakh crore over the last three months, the combined market capitalisation of all listed companies on the NSE has seen lower erosion at ₹8 lakh crore during the same period.

The outperformance of broader market and a record fund raising have cushioned the overall market cap erosion this time. So far in 2024, about 75 companies have raised over ₹1.5 lakh crore through mainboard IPOs, which in turn boosted the overall market capitalisation of the country. Further, the broader market has outperformed the benchmark Nifty50 over the last three months.

Among the Nifty50 constituents, shares of IndusInd Bank have lost as much as 31% over the last three months, which was followed by Asian Paints (29.4%) and Tata Consumer products (24.7%). In fact, a fourth of Nifty members have lost at least 11% of their value since September 12. However, in absolute terms, Reliance Industries (RIL) and Hindustan Unilever (HUL) have lost the most. While the market valuation of RIL has eroded by ₹2.9 lakh crore over the last three months, HUL has seen an erosion to the tune of Rs 1.4 lakh crore during the same period.

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