How big is the largest Indian listed company?

While investing with a global perspective in mind, one has to realise that the largest market cap firm in one’s own country, may be a small-cap company in the global perspective.

A good case here may be of Reliance Industries and Tata Consultancy Services. Reliance Industries, the largest market cap company in India, has a total market cap of 9,32,469.98 crore in the terms of rupees. The second largest company in India by market cap is Tata Consultancy Services, which has a market cap of 8,18,226.25 crore.

These two companies may look bigger in Indian context however, one may want to analyse the size of these two, vis-a-vis the giants of the world. Reliance is less than one-tenth of the largest market cap company in the world-Saudi Amarco and the second largest company Apple Inc.

Surprisingly, even though, India is one of the top 10 countries in the world by any measure of GDP (nominal/real/PPP), the biggest Indian listed companies do not show up even in the top 50 largest market cap companies in the world. One reason for this is that US economy is twice as big as the second largest one (China) and almost seven times to that of Indian economy. Thus, the majority of the world top companies are American.

The other reason is more interesting and positive news for Indian equity investors. USA has a market capitalisation (Mcap) to Gross National Income (GNI) ratio of 172.47 per cent versus India’s 75.06 per cent. This shows that Indian market is still undervalued vis-a-vis US market. Indian large-cap has a long way to go to become a true global large-cap. With a strong economic growth and convergence of Indian and US Mcap to GNI ratio, we might finally see the heavyweights of India in the global Top 10.