Top 10 companies command a third of India's market capitalisation

A study conducted by UBS reveals that the contribution of the top 10 companies’ market value to the country’s total market capitalisation (mcap) is the least in Japan among major global markets. The US and India are also among the least concentrated markets, the Swiss bank highlighted in its Global Investment Returns Yearbook 2024.

In contrast, Switzerland, South Korea, and Taiwan are the most concentrated, with the top 10 companies making up between 58 per cent and 72 per cent of their market. The top three companies in these countries collectively account for nearly half of their mcap.

For nearly the top 10 major markets, the top 10 companies constitute over half of their market. In the case of Japan, the top 10 account for only a fifth of its market, while in the US and India, the top 10 companies represent a fourth and a third, respectively.

The lower the concentration, the stronger the depth and risk profile of the market.

According to experts, if a company or sector dominates the market, there is a risk that the market could collapse if anything goes wrong with the sector or the company.

“In 33 of 47 countries, the weighting of three large industries accounted for a majority of the country’s mcap,” observed Paul Marsh and Mike Staunton of London Business School in the yearbook. “In 35 of 40 worldwide industries, two countries accounted for a majority of the industry’s global capitalisation,” they added.