India exits $2 trillion m-cap club after sell-off by FPIs

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Eight of the 10 most valued Indian companies saw a combined loss of Rs 89,535 crore in market valuation in the week ended August 2.




After two years, the Indian stock market has exited the $2 trillion club after the sell-off on August 2 erased 8.8 percent of investor wealth.

The value of all listed Indian stocks fell to $1.97 trillion on August 2 after foreign portfolio investors (FPIs) began withdrawing their capital, reports The Economic Times, citing Bloomberg data.

This pushed India to the ninth position among large markets, sliding below Germany.


Eight of the 10 most valued Indian companies saw a combined loss of Rs 89,535 crore in market valuation in the week-ended August 2.

India had first crossed the $2 trillion market capitalisation (m-cap) mark in May 28, 2017. It had replaced Germany as the seventh largest market. In November 2017, it became the eighth largest country in terms of market valuation after overtaking Canada.

FPIs began pulling out their money from capital markets after Finance Minister Nirmala Sitharaman suggested that FPIs restructure themselves as corporate entities to avoid paying a higher levy that was imposed on the super-rich in its Budget presentation on July 5.

State Bank of India (SBI), Oil & Natural Gas Corporation (ONGC), Axis Bank, Coal India and Larsen & Toubrowere the biggest contributors to the erosion in market valuation in July.

FPIs withdrew a net Rs 2,881 crore from the Indian capital markets in just the first two sessions of August. They were net sellers in July, reversing the trend in 2019’s first half were they were net investors.

Countries in the $2 trillion club include the US, China, Japan, Hong Kong, UK, France, Canada and Germany.

Among the largest 15 countries by m-cap, only India and South Korea have so far lost market value in 2019.



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