Market's New Favourites

Newly listed insurance, mutual fund, pure play credit card and small finance banking players are charming Dalal Street

- Anand Adhikari

In August, HDFC Life, the fastest-growing private sector life insurance company, entered the coveted Nifty-50, the flagship index of the National Stock Exchange tracked by global investors. The newly listed private insurer is now rubbing shoulders with the likes of HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank. Soon, Life Insurance Corp of India (LIC) is also set to debut on Dalal Street, which, according to experts, could be dubbed as India's ARAMCO moment (the Saudi Arabian oil major recently turned out to be the company with the largest market cap globally). In fact, with a likely valuation of over ₹10 lakh crore, LIC will only be second to Reliance Industries in market cap (₹14 lakh crore), ahead of biggies such as TCS, HUL and Infosys.

The BFSI — banking, financial services and insurance — game is changing the stock market. For decades, banks and non-banking financial firms (NBFCs) ruled the stock market in terms of market cap and investors interest. However, the last few years have seen increasing number of listings from life insurance, general insurance, mutual fund asset management companies (AMCs), pure play credit card companies and small finance banks. Business Today’s listing of top 500 companies in India captures the trend. HDFC Life, for instance, has gone up eight ranks, from 32 to 24. A pure play credit card company, SBI Cards & Payments, which got listed this year, has been ranked 43rd in the very first year. HDFC AMC has improved its ranking from 75th to 49th position. Small finance banks have also found a place among the top 100 companies.

The Positives

So, what is working in their favour?