In the Sensex, the largest company in terms of m-cap in 1991 was 120 times bigger than the smallest company. Today, the largest company is only 14 times bigger than the smallest one.

The benchmark Sensex has undergone a complete transformation in the past 25 years, since India embraced liberalisation.

The Sensex, as we see it today, is completely different from the one in 1991, which was dominatd by manufacturers, commodity producers and small-ticket consumer companies.

The Tata group continues to hold the lead position in the market capitalisation chart as it did in 1991.

Today, Tata Consultancy Services is the most valuable company, while the 1991 topper Tata Iron and Steel (now Tata Steel) is the least valuable and runs the risk of being dropped from the index. 

In 1991, the second and third largest companies by market cap were Tata Engineering and Locomotive Co (now Tata Motors) and Reliance Industries. Only four Sensex constituents had a market capitalisation of over Rs 1,000 crore.

Consumer firms have maintained their dominance but the sector is almost equally divided between fast-moving consumer goods companies, pharma companies and auto companies.

In 1991, the largest company (in terms of market cap) accounted for 18 per cent of the index companies’ combined market cap and was 120 times bigger than the smallest company — Zenith Birla.

Today, the weightage of the largest company has reduced to 10 per cent and it is only 14 times bigger than the least valuable member in terms of market capitalisation.

Now, the index is dominated by banks and technology companies, which together account for nearly 40 per cent of the index companies’ combined market cap. 

Another key trend is that foreign multinationals have exited the index, paving the way for Indian multinationals such as TCS, Bharti Airtel and Sun Pharma.

In 1991, there were five foreign MNCs in the index. Now, there is only one — Hindustan Unilever.

Public sector firms such as Coal India and Oil and Natural Gas Corporation, which were not listed in 1991, are also key components.

In all, only seven companies (less than a quarter of the 30-share index) — Tata Steel, Tata Motors, Reliance Industries, Mahindra & Mahindra, Larsen & Toubro, ITC and Hindustan Unilever — have been able to maintain their index membership, indicating the churn in the Indian economy during the period.

Transformed by reforms

• Tata Steel (then Tata Iron and Steel), the most valuable index company in 1991, is now the least valuable
• Only seven companies have retained their place in the Sensex during the period
• The index is now dominated by technology companies and banks, unlike the dominance of manufacturers in 1991
• The index now has 6 PSUs, compared to none in 1991
• Foreign multinationals, except Hindustan Unilever, have been replaced by Indian MNCs
• Five Index companies — Bharti Airtel, HDFC Bank, Axis Bank, ICICI Bank and Adani Ports — account for 17 per cent of the combined market cap owe their existence to reforms
  
  Photograph: Reuters