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Top 10 Best Companies to Invest in India on the Basis of Market Value

Top 10 Best Companies to Invest in India on the basis of Market Value

 

The price an asset would fetch in the marketplace, or the value that the financial community assigns to particular equity or firm, is known as market value. A publicly-traded company’s market capitalization is calculated by multiplying the number of outstanding shares by the current share price, referred to as market value. Because market values for exchange-traded assets like stocks and futures are extensively publicized and publicly accessible, determining market value for over-the-counter instruments like fixed income securities is a little more complicated.

However, evaluating the value of illiquid assets like real estate and enterprises, which may involve real estate appraisers and business valuation experts, is the most challenging part of calculating market value.

 

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Understanding Market Value


The market value is a strong indicator of how investors feel about its future prospects. The market has a wide variety of market values, ranging from less than $1 million for the tiniest businesses to hundreds of billions for the world’s largest and most profitable companies.

Investors’ valuations or multiples of companies, like price-to-sales, price-to-earnings, enterprise value-to-EBITDA, and so on, define market value. The larger the market value, the higher the discounts.

 

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The Dynamic Nature of Market Values


The business cycle impacts market value, which can fluctuate dramatically over time. During bear markets that accompany recessions, market values plummet, while bull markets occur during economic expansions soar.

Many more elements influence market value, including the company’s sector of operation, profitability, debt load, and the overall market environment.

For example, if Company X and Company B both have $100 million in annual sales, but X is a fast-growing technology company, and B is a stodgy store, X’s market value will be much more than B’s.

Company X may be selling at a sales multiple of 5, giving it a market value of $500 million. In contrast, Company B may be trading at a sales multiple of 2, giving it a market value of $200 million in the example above.

A company’s market value may differ dramatically from its book value or shareholders’ equity. A stock is deemed undervalued if its market value is relatively lower than its book value, implying that it is trading at a discount to its book value per share. This does not mean that a stock is overvalued if it trades at a discount to book value; it all relies on the industry and the size of the deal compared to the business’s peers.
The book value has a significant impact on its implicit value, influencing whether a company’s stock price rises or declines.

 

The Top 10 Companies to Invest in India Based on Market Value are listed below.

 

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1. Reliance Industries 


With a market capitalization of 1,611,575 crores, Reliance Industries is the most valuable Indian company. The Mumbai-based global conglomerate operates in many industries, including textiles, telecommunications, retail, natural resources, and petrochemicals.

Reliance Industries Limited (RIL) is a Mumbai-based Indian multinational conglomerate business. RIL’s diversified activities are energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles. Reliance Industries is among India’s most profitable businesses and the country’s largest publicly traded firm in market capitalization and revenue. It is India’s tenth largest employer, employing over 236,000 people. RIL had a market capitalization of US$243 billion as of October 2021.

The company is now ranked 155th on Fortune’s Global 500 list of the world’s largest corporations in 2021. With access to over 100 countries’ markets, Reliance continues to be India’s leading exporter, accounting for 8% of the country’s overall product exports. Reliance is responsible for around 5% of the entire customs and excise duty revenue collected by the Indian government. It is the private sector’s top income tax payer. The company’s free cash flow is negative.

The promoter family, the Ambani family, owns approximately 49.38 per cent of the total shares, while public shareholders, including FIIs and corporate bodies, own the remaining 50.62 per cent. With 7.98 per cent of the company’s shares, Life Insurance Corporation of India is the largest non-promoter shareholder.

Nita Dalal Ambani is the director. The corporation announced a repurchase programme in January 2012, with a maximum of 12 crores (120 million) shares to be bought for Rs. 10,400 crores (US$1.5 billion). The corporation had repurchased 4.62 crores (46.2 million) shares for 3,366 crores (US$450 million) by the end of January 2013.
Listing

The National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE) list the company’s equity shares. The company’s Global Depository Receipts (GDRs) are traded on the Luxembourg Stock Exchange. It has issued approximately 5.6 crores (56 million) GDRs, equal to two company equity shares. The Luxembourg Stock Exchange lists about 3.46 per cent of the company’s total shares.
Its debt instruments are traded on the National Stock Exchange.

 

Wholesale Debt Market segment


CRISIL (a subsidiary of S&P) and Fitch have given AAA domestic credit ratings. Moody’s and S&P have given the company Baa2 a positive outlook (local currency issuer rating) and BBB+ outlook investment-grade ratings for its foreign debt. On December 28, 2017, RIL stated that it would purchase the wireless assets of Anil Ambani’s Reliance Communications for about 23,000 crores.

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2. TATA Consultancy Services

 

Tata Consultancy Services is a Mumbai-based global information technology services and consulting corporation with a primary campus in Chennai, Tamil Nadu. As of 2021, TCS was the world’s largest IT services company by market capitalization ($200 billion). It is a Tata Group company with operations in 46 countries and 149 locations.

TCS is the second-largest company in India by market value and one of the world’s most valuable IT services brands. TCS was the highest-ranking IT services company and the top Indian company in Forbes’ World’s Most Innovative Companies ranking in 2015, at 64th overall. It became the first Indian IT company to exceed $100 billion in market capitalization and the second Indian company ever after its market capitalization reached 6.793 trillion on the Bombay Stock Exchange in April 2018. (after Reliance Industries in 2007).

In 2016–2017, Tata Sons’ parent company owned 72.05 per cent of TCS, while TCS generated more than 70% of Tata Sons’ dividends. In March 2018, Tata Sons sold $1.25 billion worth of TCS stock in a bulk transaction. On September 15, 2021, TCS became the first Indian IT company to reach a market valuation of $200 billion.

 

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3. HDFC Bank

 

HDFC Bank Limited is a Mumbai-based Indian banking and financial services corporation. As of April 2021, India’s largest private sector bank by assets and the world’s tenth-largest bank by market capitalization. It has a market capitalization of $122.50 billion, making it the third-largest firm on the Indian stock exchanges. With approximately 120,000 people, it is India’s tenth largest employer.

HDFC Bank and Times Bank merged in February 2000. This was the first merger of two private banks in New Generation private sector banks. Times Bank was formed by Bennett, Coleman and Co. Ltd., widely known as The Times Group, India’s largest media corporation.

In 2008, HDFC Bank acquired the Centurion Bank of Punjab (CBoP). The directors of HDFC Bank approved the $95.1 billion acquisition of CBoP, making it one of India’s largest financial mergers.

The bank purchased a 9.99 per cent stake in FERBINE in 2021. Similar to the National Payments Corporation of India, this Tata Group-backed company will run a pan-India umbrella organization for retail payment systems.

In 2021, the bank partnered with Paytm to provide a line of credit cards powered by Visa’s global card network.

In March 2020, HDFC Bank’s parent company, Housing Development Finance Corporation, invested 1,000 crores in Yes Bank. 75 per cent of Yes Bank’s total investment will be locked in for three years, according to the company’s rehabilitation plan. On March 14, Yes Bank issued the Corporation 100 crore shares with a face value of 2 each for a consideration of 10 per share (including an eight premium), amounting to 7.97% of Yes Bank’s post-issue equity share capital.

 

Stock ownership and listing

HDFC Bank’s equity shares are listed on both the Bombay Stock Exchange and the National Stock Exchange of India. The American depositary receipts issued by JP Morgan Chase Bank are traded on the New York Stock Exchange.

 

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4. Infosys


Infosys is valued at 747,299 crores in market value, putting it in fourth place among the top ten Indian companies. Infosys, founded in 1981, is a global leader in the IT services industry.

Infosys Limited is an Indian multinational IT organization specializing in business consulting, information technology, and outsourcing. The company was founded in Pune and is based in Bangalore. According to Forbes’ Global 2000 list, Infosys will be India’s second-biggest IT company by 2020, behind Tata Consultancy Services and the world’s 602nd largest public corporation. CRISIL AAA / Stable / CRISIL Number 1+ is the company’s credit rating (rating by CRISIL).

On August 24, 2021, Infosys became the fourth Indian company to reach a market capitalization of $100 billion. Infosys’ stock is traded on the BSE, a constituent of the BSE SENSEX, and the NSE, a constituent of the NIFTY 50. Its shares are traded on the New York Stock Exchange as American depositary receipts (ADRs).

Starting in June 1993, when the company’s shares were initially listed, the promoters’ stake has gradually decreased. On March 11, 1999, Infosys became the first Indian-registered business to list Employee Stock Option Schemes and ADRs on NASDAQ, significantly reducing the promoters’ interests. The promoter held 12.95 per cent, foreign institutional investors (FIIs) 33.39 per cent, and domestic institutional investors (DIIs) 21.98% of July 29, 2021.

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5. ICICI Bank


ICICI Bank has a market capitalization of 563,557 crores, putting it in fifth place among India’s largest companies. It provides a comprehensive range of banking products and financial services to retail and business customers through its group customers through various channels.

ICICI is an Indian multinational bank and financial services corporation headquartered in Vadodara. It provides a complete variety of banking products and financial services to corporate and retail customers in investment banking, life, non-life insurance, venture capital, and asset management through multiple delivery channels and specialized subsidiaries.

The bank operates in 17 countries and has 5,275 branches and 15,589 ATMs in India.
The bank has offices in the United States, Singapore, Bahrain, Hong Kong, Qatar, Oman, China, and South Africa, and representative offices in Bangladesh, Malaysia, and Indonesia. The corporation’s UK business has also established offices in Belgium and Germany.

Over the years, ICICI Bank has helped to build many Indian institutions that have helped to establish financial infrastructure in the country:

NSE was founded in 1992 on behalf of the Indian government by India’s leading financial institutions (including ICICI Ltd.) to provide a nationwide trading facility for equities, debt instruments, and hybrids by ensuring equal access to investors across the country via an appropriate communication network.

CRISIL, our country’s first professional credit rating agency, was founded in 1987 by ICICI Ltd and UTI.

ICICI Bank Ltd, LIC, NABARD, NSE, Canara Bank, CRISIL, Goldman Sachs, Indian Farmers Fertilizer Cooperative Limited (IFFCO), and Punjab National Bank founded NCDEX (National Commodities and Derivatives Exchange) in 2003.

In 2006, ICICI Bank helped establish “FINO Cross Link to Case Link Study,” a company that would provide technology solutions and services to the country’s underserved and underbanked population. FINO enables financial institutions to conceptualize, create, and operationalize projects to support sector activities in microfinance and livelihoods using technology like smart cards, biometrics, and a suite of support services.

The Entrepreneurship Development Institute of India (EDII) was founded in 1983 as a national resource organization dedicated to entrepreneurship development, education, training, and research by the former apex financial institutions IDBI, ICICI, IFCI, and SBI, with the support of the Gujarat government.

In 1995, national-level financial institutions such as ICICI Ltd established the Eastern Development Finance Corporation (NEDFI) in Guwahati, Assam, to develop industries, infrastructure, animal husbandry, agri-horticulture plantation, medicinal plants, sericulture, aquaculture, poultry, and dairy in India’s North-Eastern states.

Following the Securitisation Act in 2002, ICICI Bank established Asset Reconstruction Company India Limited (ARCIL) in 2003 with the help of other financial institutions. ARCIL was formed to acquire non-performing assets from financial institutions and banks to improve asset management and maximize recovery.

In the year 2000, ICICI Bank assisted in establishing the Credit Information Bureau of India Limited (CIBIL), India’s first national credit bureau. CIBIL provides credit information reports to its members as a repository of information (covering business and consumer borrowers).

 

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6. Hindustan Unilever


Hindustan Unilever is placed sixth among the top ten Indian corporations in market value, with a market valuation of 539,947 crores. In India’s fast-moving consumer goods business, the company has a long and storied history. On any given day, nine out of ten Indian households use the company’s products, according to the company’s website.

HUL is an Indian consumer goods firm based in Mumbai. It is a subsidiary of the British company Unilever. It specializes in fast-moving consumer goods, including meals, beverages, cleaning supplies, personal care products, water purifiers, and other items.
HUL was formed in 1931 as Hindustan Vanaspati Manufacturing Co., and after a merger of constituent businesses in 1956, it was renamed Hindustan Lever Limited. The company was renamed Hindustan Unilever Limited in June 2007.

As of 2019, Hindustan Unilever had 44 product brands across 14 categories in its portfolio. The company had 18,000 workers and sales of 34,619 crores in FY2017–18.
In December 2018, HUL announced that it would purchase GlaxoSmithKline’s India consumer segment for $3.8 billion in an all-equity deal with a 1:4.39 ratio. The integration of GSK’s 3,800 employees, on the other hand, remained unknown, as HUL indicated that there was no stipulation in the purchase allowing for employee retention. After completing all legal procedures, HUL concluded its merger with GlaxoSmithKline Consumer Healthcare (GSKCH India) in April 2020.

 

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7. State Bank of India (SBI)


SBI is ranked seventh with a market capitalization of Rs. 474878 crores. With headquarters in Mumbai, Maharashtra, it is an Indian multinational public sector banking and financial services statutory body.

SBI is a statutory body in India that provides financial services and is a multinational public sector bank. SBI headquarters are located in Mumbai, Maharashtra. SBI ranks 221st on the Fortune Global 500 list of the world’s largest companies for 2020, making it the world’s 43rd largest bank and the only Indian bank on the list. With a 23% asset market share and 25% per cent of the entire loan and deposit market, India’s largest public sector bank. With almost 250,000 employees, it is India’s fifth-largest employer.

The bank is descended from the Bank of Calcutta, which was created in 1806 via the Imperial Bank of India, making it the Indian Subcontinent’s oldest commercial bank. The Bank of Madras joined with the Bank of Calcutta and the Bank of Bombay, British India’s other two presidential banks, to form the Imperial Bank of India, which later became the SBI in 1955.

The bank was founded throughout its 200-year history by the merger and acquisition of roughly twenty banks. In 1955, the Indian government assumed control of the Imperial Bank of India. RBI (India’s central bank) owned a 60% interest and was renamed the State Bank of India.

As of March 31, 2017, the government of India owned approximately 61.23 per cent of SBI’s equity shares. With 8.82 per cent of the company’s shares, the Life Insurance Corporation of India, also state-owned, is the largest non-promoter stakeholder.

SBI’s equity shares are traded on the Bombay Stock Exchange, a part of the BSE SENSEX index, and the National Stock Exchange of India, a part of the CNX Nifty index. The London Stock Exchange lists its Global Depository Receipts (GDRs).

 

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8. India Tobacco Company Limited (ITC)

 

ITC Limited, based in Kolkata, is an Indian conglomerate. ITC operates in various industries, including FMCG, hotels, software, packaging, paperboards, speciality papers, and agriculture. There are 13 businesses in the corporation, divided into five categories. It sells its goods in more than 90 countries. Its products are sold in over 6 million retail places worldwide.

The Imperial Tobacco Company of India Limited was founded in 1910 and was renamed the India Tobacco Company Limited in 1970, then I.T.C. Limited in 1974. The company’s name has been changed to ITC Limited, and “ITC” is no longer an abbreviation. ITC had a market capitalization of US$35 billion and an annual turnover of US$10.74 billion in 2019–20. It employs 36,500 individuals across India in over 60 sites.

The Bombay Stock Exchange (BSE), the National Stock Exchange of India (NSE), and the Calcutta Stock Exchange all list ITC’s equity shares (CSE). The Luxembourg Stock Exchange lists the company’s Global Depository Receipts (GDRs). ITC is a component of two leading Indian stock market indices: the BSE SENSEX and the NSE NIFTY 50.

 

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9. Bajaj Finance


The Indian financial services firm is now ranked ninth on the list, with a market capitalization of 436,323 crores. Bajaj Finance is a loan, asset management, wealth management, and insurance company based in Pune, Maharashtra.

It is a non-banking financial services company based in the Indian city of Pune.
Lending, asset management, wealth management, and insurance are its main focus areas.

The company operates in consumer financing, life insurance, and general insurance and employs over 20,154 people across 1,409 sites. It is also involved in wind–energy generation, with a total installed capacity of 65.2 MW, in addition to financial services.

 

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10. Bharti Airtel


Bharti Airtel Limited, or just Airtel, is an Indian telecommunications firm headquartered in New Delhi. Airtel has operations in 18 South Asian and African nations and the Channel Islands. Depending on the country of operation, they offer 2G, 4G LTE, 4G+ mobile services, fixed-line broadband, and voice services. India’s telecom circles now have access to Airtel’s VoLTE technology. It is India’s second-largest mobile network operator and the world’s third-largest mobile network provider. Airtel was ranked India’s second most valuable brand in Millward Brown and WPP plc’s first-ever Brandz ranking.

By outsourcing all of its business activities except marketing, sales, and finance, Airtel is credited with developing the “minute’s factory” model of low-cost, high-volume manufacture. Many operators have embraced the strategy since then. Ericsson, Huawei, and Nokia Networks provide and maintain Airtel’s equipment, with Amdocs providing IT support.

Transmission towers are owned by Bharti subsidiaries and joint venture organizations such as Bharti Infratel and Indus Towers in India. Ericsson agreed to be paid per minute rather than in advance for the installation and maintenance of their equipment for the first time, allowing Airtel to offer inexpensive call rates of 1 (1.3 US) per minute.
Bharti Airtel has a market capitalization of $56.33 billion as of February 2022. According to our data, Bharti Airtel is the 311th most valuable company globally by market capitalization.

Edited and published by Ashlyn Joy

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