Top Companies in India by Market Capitalisation: Should you invest?

Top Companies in India Introduction

Market capitalization or simply market cap is one of the most important factors investors look for before investing in the stock market. For those who don't know, the market cap is a parameter that helps in determining the size of a company. It is calculated at the time of comparing it with the market cap of other companies. In this article, we are going to share a list consisting of the best companies in the share market along with the top ten share in India. If this interests you, then keep reading!

Summary in Brief 

• What Exactly is Market Capitalization? Why Does it Matter to Stock Market Investors? 
• Different Types of Market Cap
• List of Top 10 Companies in India 2022    
• Should You Invest in These High Market Cap Companies? 
• Bottom Line 
• Frequently Asked Questions 

What Exactly is Market Capitalization? Why Does it Matter to Stock Market Investors? 

Market capitalization in simple terms is the total value of outstanding shares of a company. It is an important factor used by stock market investors to determine the overall value and size of a company. Moreover, it is calculated by multiplying the market price of a company's share with its total number of shares. The resulting value from this formula is used by investors to analyze a company's worth in the market. Let's understand this with an example:

If company X has a total of 10 million outstanding shares and the value of each share is Rs. 200, then the market cap of X would be Rs. 200 Crore. 

Different Types of Market Cap

Companies are categorized on the basis of their capsize into three groups: Small-cap, Large Cap, and Mid cap. 

Large-Cap: Large-cap companies are those with a market cap of over Rs. 10,000 Crore. These are the most established companies that have been around for a couple of decades. Investors who are not willing to take any risk prefer investing in these companies because they are stable and offer very low risk. 

Mid-Cap: These companies usually have a market cap ranging between 2,000 to 10,000 crore. These companies are in their development phase and hold a great potential to grow as compared to large-cap companies. These offer slightly higher risk than the large-cap companies. 

Small-Cap: Small-cap companies have a market cap of less than Rs. 2,000 Crore. This category includes young and emerging companies that are quite vulnerable to market volatility and competition. They incur the highest risk as compared to mid and large-cap companies.

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List of Top 10 Companies in India 2022    

Following is a list of 10 top market cap companies in India:

(Data as of November 25th, 2022)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

1. Reliance Industries

The very first company in our list of top 10 stocks in India is none other than Reliance Industries. At present, it is leading the market with a market cap value of Rs. 1,795,732.38 crores. It is the highest market capitalization in India. Led by Mukesh Ambani, the company engages in a huge range of businesses and services in the retail, textiles, telecommunications, petrochemicals, and natural resources sectors in India. 

2. TATA Consultancy Services (TCS) 

After Reliance, TCS is named among the top 5 companies in India. It has a huge market cap of Rs. 1,396,835.78 crores. It is the most renowned IT company in India headquartered in Mumbai. It ranks among the global leaders in IT services, consultancy, and business solutions. 

3. HDFC Bank

The next company with the highest market capitalization in India is HDFC Bank. With a market cap of Rs. 931,429.06 crores, HDFC bank is named among the leaders in the banking and financial institutions in the country. Moreover, it is the first RBI-approved bank to offer services to the private sector. 

4. Infosys

The present market cap of Infosys is Rs. ₹795,241.87 crores and it is in the fourth place in our list of top 10 stocks in India. The company was founded in 1981 and currently is a world leader in IT services. 

5. ICICI Bank

The market cap of ICICI Bank is Rs. 513,166.77 crores and hence, ranks among the top 10 shares in India. The bank provides a huge range of financial services as well as banking products to corporate and retail customers via a wide variety of channels. 

6. Hindustan Unilever

Hindustan Unilever is a world leader with a market cap of Rs.494,823.92 crores. It is ranked at sixth position in the list of top ten shares in India. It is a market leader in the FMGC sector of India and has been around for more than 8 decades i.e 80 years. Moreover, the company claims that 9 out of 10 houses in India use its products. 

7. SBI

The 7th largest market cap company in this list is the State Bank of India (SBI). With a market cap of Rs. 457,118.60 Crores, it offers banking and financial services to the public sector. Further, the company has its headquarters in Mumbai. 

8. HDFC

HDFC stands for Housing Development Finance Corporation Limited. It is a financial services company based out of Mumbai, Maharashtra. Its services include asset management, banking, general insurance, venture capital, realty education, and a few others. The market cap of HDFC is Rs. 503,115.35 crores. 

9. Bajaj Finance

The company at number nine in our share price list of all companies is Bajaj Finance. It has a market value of Rs. 452,861.07 crores and has its headquarters in Pune, Maharashtra. It engages in asset management, leasing, insurance, and wealth management. 

10. Bharti Airtel

Bharti Airtel has a market cap of Rs. 430,856.89 Crores and hence positioned at number 10 in our list. It is named among the top 3 MSPs (Mobile Service Providers) in the world, in terms of subscribers. Moreover, the company has its headquarters in New Delhi. 

Should You Invest in These High Market Cap Companies? 

Now, the big question is, should you consider investing in large-cap companies? The answer depends on your financial goals and the level of risk you can take. If you're someone who is not willing to take risks and wants to earn optimum returns in the safest way, then you should definitely invest in the companies we have listed above. 

Below are the benefits of investing in companies with a higher market cap:

1. Stability

Higher cap companies are established and have been operating for multiple decades. This means they are the market leaders who are financially very strong. As a result, they don't typically experience insolvency until and unless there is some major issue in their business management. For this reason, large-cap companies offer great stability to investors along with a steady return rate. Moreover, large companies usually pay out a regular dividend to the investor, which can help you generate a regular income. 

Additionally, large companies can withstand harsh market conditions and boom in the bull markets. This makes them a safer place to invest. 

2. Better Capital Appreciation 

Another advantage of investing in higher cap companies is that they offer a much better capital appreciation. The companies listed above have consistent earnings and powerful performance that ensures good returns. Also, their stock prices are mostly stable, which results in great appreciation over the long term. 

3. High Liquidity 

When market volatility is in action, liquidity becomes crucial, which is offered greatly by stocks of higher cap companies. This means you can easily liquidate your portfolio during the downtrends in the market. Additionally, large-cap fund managers can also buy and sell large-cap stocks to maximize returns. What's more? Market fluctuations have very little impact on the large-cap companies and thus, they prevent investors from many potential losses. 

Bottom Line 

We have discussed the top 10 companies in India with the highest market capitalization. All of these companies are well-known, established, and have earned immense reputations in the market. They allow investors to earn safe returns as they involve very low risk. Before investing in any of these companies, we recommend conducting in-depth research about their performance and also identifying your financial goal and risk appetite. 

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns