Mumbai accounts for over a third of BSE 500’s market capitalisation

It was once believed that India lives in its villages. Now it is clear that India’s wealth lies in its cities, or more specifically, Mumbai. A study conducted by Delhi-based SMC Global classified companies geographically on the location of their registered offices. It reveals that Mumbai-registered companies account for 36.28% of the total BSE 500 market cap.

Some of the prominent names based out of Mumbai are Reliance Industries, L&T, HDFC and SBI.
Also, out of the market capitalisation ascribed to Maharashtra — which has the highest market capitalisation among the states — more than 90% originates from Mumbai.

In fact, Mumbai and six other cities account for 85.71% of the total market capitalisation of BSE 500, with Delhi NCR (National Capital Region, which includes satellite cities such as Gurgaon and Noida along with the capital) contributing 27.82%.

After the financial and political capitals, state capitals take the fore. Bangalore lays claim to 7.10%, Hyderabad to 4.86% and Kolkata accounts for 3.83%, while Ahmedabad and Chennai account for 3.35% and 2.47%, respectively.

On a state-wide basis, five states in combination with Delhi NCR and Maharashtra account for 94.20% of the total market cap. A total of 66.17% of the index’s market cap can be traced to Maharashtra and Delhi NCR. While the latter accounts for 38.35%, Delhi accounts 27.82%.

Karnataka accounts for 7.74%, Gujarat, 7.48%, Andhra Pradesh is at 4.95% and Tamil Nadu at 4.02%, while Bengal has 3.83%. Though the big Indian companies have a pan-India presence with factories or plants located across the country, they tend to have registered offices in metros because of the ease of operations and presence of other corporate houses, suggested the study.

“The traditional metro cities have accumulation advantage. Its ultimately the money which brings in more money. As the Indian economy keeps evolving, tier-2 and tier-3 cities may catch  up gradually, to bring-in more equitable distribution of wealth across the country.” said Jagannadham Thunuguntla, equity head at SMC Capitals.