Amid an ongoing market correction, nearly 20 companies listed on the BSE have slipped below the ₹1 lakh crore market capitalisation threshold since the end of September 2024, when Indian equities were at their peak.
The affected firms include Mankind Pharma, Tata Consumer Products, CG Power, Havells India, Dr. Reddy’s Laboratories, Apollo Hospitals, JSW Energy, Jindal Steel & Power, Info Edge, Samvardhana Motherson, Dabur, Zydus Lifesciences, ICICI Lombard, Indus Towers, Cummins India, Bosch, ICICI Prudential Life, Canara Bank, and Polycab, among others.
As of now, 86 companies maintain a market cap above ₹1 lakh crore—a 19% decline from 106 in September 2024. However, five new entrants have emerged, benefiting from strong stock rallies. These include Hyundai Motor India, The Indian Hotels Company, Shree Cement, Mazagon Dock Shipbuilders, and Max Healthcare Institute.
Factors Driving the Market Correction
The correction has been triggered by several key factors, including:
- Sustained foreign investor selling
- Rich valuations
- Softening earnings
- Slower economic momentum
- Geopolitical concerns, particularly post the US elections
Since the market highs in September, the Sensex and Nifty have dropped over 10%, while the BSE MidCap and SmallCap indices have fallen by nearly 15% each.
Historical Context
Interestingly, despite the recent correction, the number of companies with a market cap above ₹1 lakh crore has slightly increased between the end of FY24 and early FY25. Over the years, this category has seen fluctuations, with 48 companies in FY23 and FY22, up from 36 in FY21, 19 in FY20, and 27 in FY18.
Market Outlook
Analysts note that the market faced excessive selling pressure, leading to a much-needed valuation reset. This recalibration offers a strategic opportunity for investors to accumulate fundamentally sound stocks at more reasonable valuations.
Morgan Stanley, in its latest report, characterised the correction as a potential buying opportunity despite lingering concerns around growth, retail investor sentiment, and stretched valuations. While acknowledging the challenge in timing the bottom, the firm remains optimistic about a market rebound. It highlighted private financials as offering the most attractive risk-reward tradeoff currently.
Veteran investors have echoed similar sentiments, calling the correction a “normal pullback within a broader bull run.” While acknowledging temporary turbulence stemming from political and economic shifts—particularly in the US—market experts remain confident in the resilience of markets and the long-term trajectory of globalisation.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice.
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