Ratans 2011 gift: TCS pips Reliance for M-cap crown

Written by Devangi Gandhi | Ashley Coutinho | Ashley Coutinho | Mumbai | Updated: Dec 31 2011, 07:33am hrs
The Indian market just about held on to its $1-trillion status in 2011 but heavyweight Reliance Industries (RIL) lost its numero uno position to TCS, the software major from the Ratan Tata-led Tata Group, by closing Fridays session at R692.90, its lowest level since March 2009.

At 15,454.90 points, the Sensex lost 25% during the year, its worst performance since 2008. India ended up among the worst performers across the globe giving up 37% in dollar terms, the result of a sharp fall in the rupee of nearly 16%. Indias market capitalisation is now R53,12,875 crore.

TCS is now Indias most valuable company with a market capitalisation of R2.272 lakh crore; the RIL scrip has given up 34.5% in 2011 to end with a market value of R2.269 lakh crore. While RIL accounted for about 14% of the Niftys total decline of 1510 points during the year, the TCS stock stayed pretty much flat. This was the second consecutive year in which RILs poor performance weighed on the indices; the stock no longer commands the most weight in either of the benchmarks, having yielded the spot to Infosys. RIL has 9.8% weight in Sensex and 8.3% in Nifty.

India in 2011 underperformed other emerging markets as well as Bric peers Brazil, Russia and China. Europes sovereign debt crisis kept global indices on the edge as leaders grappled to find a workable solution. The Dow Jones Industrial Average has emerged as the top performer among major indices, with positive returns of more than 6%. This despite the threat of a double-dip recession and a credit rating downgrade in the first half of 2011. However, better numbers on the economic front buoyed markets in the second half. The Shanghai Composite retreated 18% as China tightened monetary policy and GDP growth slowed due to weak external demand. Nikkei 225, Kospi and Hang Seng saw declines of 13.5%, 13.7% and 19.9%, respectively. Jakarta Composite managed to give positive returns as the country regained an investment-grade credit rating after 14 years.

Major European indices remained on the edge as the debt crisis escalated and the euro zone found it difficult to find a viable solution. The DAX, Eurostoxx 50 and the CAC gave negative returns over 18%. A softening global commodity demand coupled with high inflation back home roiled Brazilian markets. Its benchmark Bovespa declined for the first time since 2008, when the index retreated more than 40% in the aftermath of the global financial crisis.