Indian Market in H1CY24: Average total market cap soars to record ₹397 lakh crore; 7 midcaps elevated to largecaps
Indian Stock Market in H1 2024: The first half of 2024 saw a bull run, with market capitalisation hitting a record ₹397.1 lakh crore, up 23.4%. Midcaps led the charge, with 26.4% growth, followed by smallcaps at 25.7% and largecaps at 21.9%.
Indian Stock Market in H1 2024: The first 6 months of 2024 witnessed a bull run with multiple record highs and an over 10 percent rally in the benchmark indices. The total average market capitalisation soared to a record ₹397.1 lakh crore, a substantial 23.4 percent increase from the previous six-month period of July to December 2023, a report by domestic brokerage house Geojit Financial Services highlighted.
Moreover, mid-cap companies led the charge with a 26.4 percent rise in market capitalisation, closely followed by small-cap companies at 25.7 percent and large-cap companies at 21.9 percent, mentioned the report
The Geojit report also observed significant shifts in market categories and contributions from new IPOs. During the January to June 2024 period, 7 mid-cap companies were elevated to large-cap status, while 17 small-cap companies ascended to the mid-cap category.
The midcaps that turned largecaps in the first six months of 2024 include Hero MotoCorp, Zydus Lifesciences, JSW Energy, NHPC, BHEL, Samvardhana Motherson, and Bosch. Meanwhile, HUDCO, Bharat Dynamics, IRB Infra, Hitachi Energy, Hind Copper, Godrej, BSE, NALCO, and Cochin Shipyard were some of the smallcaps that became midcaps in this period, informed Geojit.
Conversely, seven large-cap companies were downgraded to midcaps, and 19 midcaps fell to the small-cap category, it further stated.
In the first half of 2024, several prominent large-cap companies saw a shift to the mid-cap category, including Polycab India, ICICI Prudential, ICICI Lombard, SRF, Marico, SBI Cards, and Berger Paints. On the other hand, Tata Chemicals, Sun TV, Vedant Fashions, Relaxo Footwears, Zee Entertainment, Devyani International, Piramal Enterprises, and Ramco Cements were among the mid-cap companies downgraded to smallcap status during the January to June period, noted Geojit. These changes reflect ongoing dynamics in market capitalisation and sector performance, influencing investment strategies and portfolio adjustments.
IPO Trends
As per the brokerage, two IPOs debuted in the mid-cap category - Bharti Hexacom and Go Digit General Insurance, with others entering the small-cap segment. Some of these include TBO Tek, Aadhar Housing Finance, Juniper Hotels, Gopal Snacks, Medi Assist Healthcare, BLS E-Services, etc.
Over 30 IPOs collectively added an estimated ₹2.16 lakh crore to the market cap, with 37 percent of this growth attributed to midcaps and 63 percent to smallcaps.
Furthermore, the brokerage pointed out that approximately 25 companies transitioned from the SME segment to the Main Board on the BSE, and one on the NSE, contributing nearly ₹6,640 crore to the market cap, all within the small-cap category. Geojit emphasises that these shifts and additions underscore a dynamic market environment with ample opportunities for growth and investment across various segments.
Other Market Cap Trends and Highlights
According to Geojit, within the large-cap segment, the companies ranked 31 to 50 experienced the most significant growth at 39.5 percent, followed by the 51 to 100 cluster at 31.9 percent, whereas the top-10 companies posted a 12.3 percent increase.
Meanwhile, the Midcap-150 set showed a balanced growth pattern, with the top-50 companies (ranked 101 to 150) achieving a 28.3 percent increase, informed the brokerage.
Moreover, in the small-cap sector, the growth was particularly notable among companies ranked 351 to 400 and those beyond the 1000th position. Geojit attributes this widespread growth to strong market momentum and investor confidence, indicating a healthy market environment and promising opportunities for investors across all segments.
Composition
Geojit also highlighted that during the first half of 2024, the composition of India's stock market underwent notable shifts in market cap distributions.
Largecaps, traditionally dominant, saw their share in the total market cap decrease to 63.6 percent from 64.4 percent in the previous six months and 68.3 percent a year earlier.
Conversely, midcaps expanded their market cap share to 18.21 percent from 17.78 percent in the preceding six months, indicating increased investor interest and sectoral growth within this segment.
Meanwhile, smallcaps, encompassing all other companies, also saw their market cap weight rise to 18.17 percent from 17.84 percent, with the top 250 smallcaps alone contributing 9.8 percent to the total market cap.
Furthermore, micro-cap companies, ranking between 501st and 750th, held a 4 percent market cap share, underscoring their growing significance in the market landscape.
Comparing these figures to three-year averages reveals that largecaps are generally trading at a discount relative to historical norms, while other segments appear to be commanding premiums. Geojit also noted that the total market cap across these cap categories is influenced by factors such as new listings and issues coming to the public, reflecting ongoing shifts and dynamics in the market. These trends highlight evolving investor preferences, sectoral dynamics, and the broader economic environment shaping investment strategies across different market segments, it added.
Thresholds
The brokerage also observed that over recent years, the market thresholds defining largecaps, midcaps, and smallcaps have seen substantial growth, reflecting broader market trends and investor sentiment.
Currently, the threshold for largecap classification stands impressively high at ₹84,325 crore, marking a notable 26 percent increase over the past six months, a substantial 70 percent year-on-year growth, and a remarkable 123 percent rise over the last three years.
Meanwhile, it pointed out that the entry point for midcap status has risen to approximately ₹27,564 crore, showing a 25.3 percent increase in the last six months, a robust 58 percent growth year-on-year, and a significant 133 percent surge over three years.
Additionally, in the smallcap segment, the market cap of the 250th company now stands at ₹9,188 crore, reflecting a 25.6 percent rise in the past six months, a strong 76 percent increase year-on-year, and a substantial 183 percent growth over three years, stated Geojit.
Moreover, the market cap thresholds for the 750th and 1000th companies have also seen substantial upticks, underscoring the expanding scale and dynamics within the broader market landscape. These shifts in market thresholds highlight evolving investor preferences and sectoral dynamics, influencing investment strategies across market segments.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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