Summary
The recent massive surge in the Indian stock market has significantly boosted the market capitalization of the country’s top companies by approximately Rs 3.35 lakh crore, underscoring a period of robust investor confidence and economic optimism. Leading this rally, Reliance Industries Limited (RIL) reinforced its position as India’s most valuable company, benefiting from strategic diversification, strong fundamentals, and expansion across sectors such as retail, telecommunications, and digital services. Bharti Airtel, despite some volatility, also emerged as a key player, demonstrating resilience through improved financial metrics and aggressive investments in digital infrastructure.
This surge reflects broader positive economic trends, including sustained domestic consumption growth projected to nearly triple to Rs 335 trillion by 2028, driven by rising affluence, urbanization, and evolving consumer behavior. The retail, telecommunications, and media sectors have particularly benefited, supported by increasing digital adoption and strategic industry collaborations, such as Viacom18’s partnership with Reliance and global media firms. These developments contribute to a dynamic and innovation-driven market landscape that has attracted significant investor interest and capital inflows.
Macroeconomic factors and policy developments, including easing global trade tensions and anticipation around India’s Union Budget, have further catalyzed market enthusiasm. The expansion of India’s digital economy, highlighted by record Unified Payment Interface (UPI) transactions and investments exceeding $50 billion in digital infrastructure by key firms, has reinforced confidence in technology-led growth. Despite challenges in specific segments, such as Airtel Business, overall market breadth and trading volumes indicate widespread investor participation and optimism.
However, the surge has not been without complexity. Bharti Airtel’s valuation exhibited fluctuations, reflecting sector-specific pressures amid fierce competition, while the broader market remains sensitive to geopolitical and economic uncertainties. Nevertheless, with sustained consumption growth and strategic corporate initiatives, India’s leading companies are well positioned to capitalize on long-term opportunities, shaping a promising outlook for the country’s capital markets.
Background
The recent surge in the Indian stock market was driven by a confluence of favorable factors both domestically and internationally. Key among these was the easing of global trade tensions, particularly between the United States and China, which helped restore investor confidence and contributed to a bullish sentiment across markets. This positive global environment coincided with strong domestic economic indicators and policy developments, such as the approaching Union Budget, which added further momentum to the market rally.
Within India, robust GDP growth projections have played a crucial role in shaping investor expectations. Conservative estimates forecast an average GDP growth of 7.3 percent between 2018 and 2023, followed by 6.2 percent growth from 2023 to 2028. This sustained economic expansion is expected to nearly triple domestic consumption to Rs 335 trillion by 2028, up from Rs 110 trillion in 2018, reflecting a compounded annual growth rate of 12 percent. This growth is largely driven by an expanding base of affluent and elite households, which has led to an average 8 percent increase in spending per household across all income segments.
The retail sector, a significant component of consumer expenditure, is also poised for rapid growth. Studies indicate that India’s retail market is projected to grow from $795 billion in 2017 to $1.2 trillion in 2021 and further to $1.75 trillion by 2026, underscoring the rising consumption trends fueling market optimism. Moreover, categories such as clothing, footwear, and healthcare have shown substantial growth over the past decade, with clothing and footwear consumption increasing more than fourfold since 2008.
On the global front, a notable shift towards research and development (R&D) has also contributed to the evolving economic landscape. Since 2000, the global share of R&D in GDP has increased from under 1.5 percent to nearly 2 percent by 2023, reflecting a move towards a more innovation-driven economy. Given the world GDP of approximately USD 200 trillion in 2023, this represents an additional USD 1 trillion in global R&D spending, which has implications for markets worldwide, including India.
Together, these global and domestic factors provided the backdrop for the explosive market rally witnessed recently, particularly benefiting top companies such as HDFC Bank and Bharti Airtel, which capitalized on strong fundamentals and growth opportunities.
Impact on Leading Companies
The recent surge in the Indian stock market significantly boosted the market valuations of the country’s top companies, with nine out of the top ten most valuable firms witnessing a combined increase of Rs 3.35 lakh crore. Reliance Industries led this growth, reinforcing its position as the most valuable Indian company, while Bharti Airtel stood out as the only major decliner in one instance but also emerged as a key gainer in another, reflecting dynamic shifts within the sector.
Reliance Industries Limited (RIL), a Fortune Global 500 company and the largest private sector entity in India, maintained its dominance with a market capitalization exceeding $230 billion USD as of May 2025, ranking it 55th globally by market value. Despite challenging macroeconomic conditions including geopolitical tensions and commodity trade disruptions, Reliance demonstrated resilience through strategic diversification and aggressive expansion across sectors such as retail, telecommunications, and media. In 2023, under Mukesh Ambani’s leadership, the conglomerate emphasized succession planning, bolstered broadcast and retail operations, and launched True 5G services in over 2,300 towns, further cementing its market presence. Reliance’s market capitalization crossed Rs 9.98 trillion, marking a 0.8 percent day-on-day increase, and recorded a robust compound annual growth rate of over 30 percent between 2018 and 2020.
Bharti Airtel exhibited notable financial and operational advancements amid market fluctuations. The company’s net leverage improved significantly from 3 times in fiscal 2023 to around 2.6 times in fiscal 2024, with expectations to reach approximately 2.5 times following part payments of Department of Telecommunications liabilities. Airtel operates as a leading global communications provider, serving over 550 million customers across 17 countries in South Asia and Africa, and ranks among the top three mobile operators worldwide. In 2023-24, Airtel recorded a record-high revenue market share, underpinned by substantial investments exceeding $50 billion in digital infrastructure. Its strategic focus on integrating cutting-edge technologies and sustainability initiatives enabled the company to develop scalable digital platforms with potential international applications. Furthermore, Airtel’s launch of its data center business, Nxtra, and plans for expansion in Africa underscore its commitment to growth and diversification. Despite being the sole decliner among the top firms during certain periods, the stock showed a strong 62 percent rally in early 2024, outpacing benchmark indices.
Other prominent companies in the top ten list, including HDFC Bank, Tata Consultancy Services (TCS), ICICI Bank, State Bank of India, Infosys, Bajaj Finance, Hindustan Unilever, and ITC, generally saw market gains, with four firms collectively adding over Rs 65,000 crore to their valuations in one week alone. The overall positive market sentiment, reflected in a 710-point rise in the BSE Sensex and the benchmark crossing the 59,000 mark, further reinforced investor confidence across sectors.
Key Sectors Driving the Market Surge
The recent surge in the stock market was primarily propelled by significant gains among India’s top companies, reflecting broader optimism across key sectors. Reliance Industries emerged as the largest contributor to the market uplift, driving a substantial portion of the Rs 3.35 lakh crore increase in market valuation witnessed among the nine out of ten most valuable Indian firms that posted gains last week. This surge was mirrored by a sharp rise in trading volumes and strong market breadth, indicating widespread investor confidence across multiple sectors.
The telecommunications sector, led by Bharti Airtel, showcased resilience and innovation despite being the sole decliner among the top ten firms in valuation. Airtel’s business model, anchored in digital infrastructure, digital experience, and digital services, has been a key factor in sustaining growth. The company is actively expanding scalable digital platforms, emphasizing cutting-edge technologies and sustainability to maintain a competitive edge in digital adoption.
In addition to telecommunications and conglomerates like Reliance, the media and entertainment sector has also been invigorated by strategic collaborations. Viacom18’s partnership with Reliance, Bodhi Tree Systems, and Paramount Global is set to create one of the largest TV and digital streaming companies in India, highlighting the ongoing consolidation and innovation driving market interest.
Underlying this sectoral performance is the robust growth in India’s consumer market. Reports by Deloitte and the Boston Consulting Group project a significant expansion in retail and domestic consumption markets over the next decade, with the consumer market expected to grow at a compound annual growth rate (CAGR) of approximately 12 percent, potentially tripling in size by 2028. This expanding consumer base underpins the positive outlook for companies operating in retail, telecom, and media sectors alike.
Catalysts and Drivers of the Market Surge
The recent surge in the Indian stock market, which saw the combined market valuation of the top ten most valuable companies rise by over Rs 3.35 lakh crore, was driven by multiple interrelated factors. A key contributor was the strong performance of heavyweight firms such as Reliance Industries, HDFC Bank, and Bharti Airtel, each benefiting from distinct growth catalysts. Reliance Industries led the gains with significant investor interest, reflecting confidence in its diverse business segments and expansion strategies. Bharti Airtel notably outperformed the market with a 14% rise over the past month, driven by superior margins, robust subscriber growth, and accelerated 4G conversions, which analysts have identified as core strengths underpinning its sustained rally.
Investor sentiment was buoyed by increased trading volumes and a broad-based rally across sectoral indices, signaling heightened confidence and market breadth during the trading week. The overall bullish trend was supported by ongoing expansions in digital infrastructure and services, with companies investing heavily—such as the $50 billion+ digital ecosystem built by key players—fueling optimism about long-term growth prospects and enabling secure, reliable digital solutions for consumers and businesses alike.
Moreover, macroeconomic and policy-related factors also played a significant role. The approach of the Union Budget and the expiry of major indices added complexity to market dynamics, as investors closely monitored the interplay of global and domestic policies impacting economic outlooks. Concurrently, India’s digital payment ecosystem demonstrated strong momentum, exemplified by record-high Unified Payment Interface (UPI) transactions, which surged to Rs 14.3 trillion in May 2023, reflecting the government’s push toward digitalization and inclusive financial growth. These developments collectively reinforced investor confidence in technology-driven sectors and contributed to the robust market performance.
Lastly, despite some challenges in segments such as Airtel Business, steady operational performance and targeted expansions in areas like fixed wireless access (FWA) accelerated customer additions and revenue growth, further underpinning market enthusiasm for telecom stocks. Positive investment returns from equities have also bolstered financial market growth, as evidenced by the increasing revenues of global pension funds, which experienced a compound annual growth rate of 1.3% over five years and continue to inject capital into emerging markets like India. Taken together, these factors created a favorable environment for the significant market surge observed among India’s leading companies.
Market Analysis
The recent surge in the Indian stock market has been marked by significant gains among the country’s top companies, with nine out of the ten most valuable firms collectively adding Rs 3.35 lakh crore to their market capitalization. Reliance Industries Limited (RIL) emerged as the biggest gainer, reinforcing its position as a market leader amid an otherwise volatile period characterized by the monthly expiry of major indices and anticipation surrounding the upcoming Union Budget scheduled for February 1, 2025.
Reliance Industries’ market capitalization has shown steady growth over the last decade, with data indicating a consistent upward trajectory from the financial year 2014 to 2024. Analysts maintain a positive outlook on RIL, citing the company’s superior profit margins, robust subscriber growth, and increased 4G conversions as key drivers supporting its stock performance. Despite trading above some brokerage target prices, investor confidence remains strong due to these fundamentals.
Similarly, Bharti Airtel has demonstrated resilience and growth within the telecommunications sector. The company’s equity shares, represented under the EQ series on Indian stock exchanges, continue to attract investor interest. Notably, Bharti Airtel recently prepaid additional spectrum dues amounting to nearly Rs 6,000 crore and redeemed $1 billion in debt, actions that have strengthened its financial position and market standing. The brokerage community continues to view Airtel favorably, considering its expansion and operational efficiency within a highly competitive telecom market.
Implications
The massive market surge, which propelled top companies like Reliance and Airtel to new heights, carries significant implications for the broader economy and investor sentiment. Reliance’s commitment to growth, encapsulated in its mantra “Growth is Life,” underscores the company’s strategic focus on capitalizing on expanding consumer markets and evolving economic conditions.
India’s consumption trajectory, growing at 13 percent over the past decade and projected to continue at 12 percent annually through 2028, provides a robust foundation for sustained corporate expansion. This consumption boom is driven by demographic factors such as a growing population, rising affluence, ongoing urbanization, and changing family structures. The private consumption share of India’s GDP is also expected to increase from 57 percent in 2008 to 62 percent by 2028, outpacing the emerging market average, signaling heightened domestic demand that benefits leading firms.
From an investor perspective, this growth environment creates a complex but promising landscape. Investor sentiment remains closely tied to domestic policies and global economic factors, especially with significant events such as the Union Budget influencing market dynamics.
Furthermore, brokerage firms continue to maintain positive ratings on key stocks like Reliance and Airtel, citing superior margins, robust subscriber growth, and increased 4G conversions as key growth drivers. Despite some stocks trading above target prices, strong fundamentals support continued investor confidence. This optimism is reflected in heightened trading volumes and widespread gains across sectoral indices, indicating a broad-based market rally and robust market breadth.
Future Outlook
India’s consumption is poised for substantial growth over the coming decade, with projections indicating a continuation of the robust expansion witnessed in the past. Consumption has grown at an average rate of 13 percent over the last ten years and is expected to sustain a 12 percent growth rate over the next ten years, rising from Rs 33 trillion in 2008 to an estimated Rs 330 trillion by 2028. This growth will be driven by factors including a rising population, increasing affluence, ongoing urbanization, and evolving family structures, signaling a shift in the underlying drivers compared to previous years.
Private consumption’s share of India’s GDP is forecasted to increase from 57 percent in 2008 to 62 percent by 2028, surpassing the emerging market average which is projected to remain steady at around 50-51 percent. This trend underscores the expanding domestic market potential and indicates greater consumer spending power that top companies like Reliance and Airtel are well positioned to leverage.
In the broader economic context, multiple scenarios envision India’s economy expanding significantly by 2035, with projections ranging from $6.6 trillion in a bearish scenario to $10.3 trillion in a bullish scenario, up from $3.65 trillion in 2025. This economic growth outlook supports positive market sentiment and continued investment inflows, as evidenced by the asset management industry’s 11th consecutive year of rising Assets Under Management (AUM) in 2023, fueled notably by inflows into equity schemes and Systematic Investment Plans (SIPs). Stable interest rates and rising economic growth are expected to sustain this momentum into 2024.
Corporate strategies reflect this optimism as well. Reliance Industries, under Mukesh Ambani’s leadership, has taken decisive steps in 2023 to diversify its business portfolio and reinforce succession planning, positioning itself for long-term leadership across multiple sectors[11
The content is provided by Harper Eastwood, Fact-Nest
