ICICI Group becomes sixth conglomerate to breach ₹10 lakh crore in market capitalisation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The combined market capitalisation of companies listed under ICICI Group went past ₹10 lakh crore for the first time after flagship — ICICI Bank — rose to its record high. The stock of ICICI Bank surged 5% on Monday (April 29), following its better-than-expected March quarter earnings.

ICICI Group — the diversified financial services group with interests in banking, insurance, investment banking, broking and treasury products and services — entered the elite club after Bajaj Group, which had joined in December last year.

Including ICICI Group — there are only six conglomerates in the country that boast a market capitalisation of at least ₹10 lakh crore. Interestingly, three of the top six conglomerates in the country belong to financials, suggesting investors continued inclination towards the sector.

While the country’s salt-to-software conglomerate — Tata Group — continues to occupy the top spot with an aggregate market capitalsation of ₹30.8 lakh crore, billionaire Mukesh Ambani-led Reliance Group ranks second with a market capitalisation of ₹22.9 lakh crore. Similarly, Adani Group and HDFC Group command a market valuation of ₹16 lakh crore and ₹13.7 lakh crore, respectively, according to data sourced from Bloomberg.

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ICICI Bank — the second largest private lender —  commands a market capitalisation of ₹8.15 lakh crore. Similarly, its other listed entities like ICICI Lombard General Insurance and ICICI Prudential Life Insurance command a valuation of ₹84,038 crore and ₹80,668 crore, respectively.

As a result, the bank dominates the group’s valuation by contributing 81% to the group’s valuation, whereas its insurance arms account for another 8% each to the aggregate market capitalisation of the group. ICICI Securities had a market capitalisation of about ₹24,600 crore.

With continued improvement in ICICI Bank’s balance sheet and asset quality, analysts have tuned more bullish on the stock. For instance, Nomura, which has a “BUY” rating on the stock with a 12-month target price of ₹1,335, observed that the bank has delivered another robust quarter aided by lower operating expenses.

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The foreign brokerage expects the bank to report sector-leading 18% loan growth and Return on Equity over FY25-FY26. “We expect ICICI Bank to deliver sector-leading Return on Assets (RoA) of 2.3% and Return on Equity (RoE) of 18% over FY25-FY26 with a 13% PAT CAGR over FY24-FY26,” wrote Nomura in an investor note.

Stocks of ICICI Bank and ICICI Lombard have rallied 16.4% and 20.1% respectively since the beginning of the year. In contrast, the benchmark Nifty50 has gained 4.2% during the same period.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow