Market capitalization of four of the ten largest companies fell by 87,960 crore rupees, with Airtel recording the largest decline

On the BSE exchange, one stock began trading with a sharp decline immediately following its listing. The company, known as Sham Foam, belongs to the SME sector and manufactures mattresses for both domestic use and various industries.

On Monday, the company's shares were listed at a 20% discount. Although the shares were issued at a price of 130 rupees during the IPO, they appeared on BSE SME at 104.00 rupees, leading to a 20% reduction in investor capital, and the price fell even further after the market opened, reaching 101 rupees.

The Sham Foam IPO was open for subscription from August 11 to 13 and attracted significant investor interest, receiving over double the subscription. The total offering volume was 2.40 times, with retail investors subscribing at 2.62 times. A total of 3.114 million new shares with a nominal value of 10 rupees were issued in this IPO.

Sham Foam produces mattresses and other comfort products, as well as industrial polyurethane foam. This foam is used in furniture, textiles, sporting goods, and the automotive industry. The company's mattresses are sold under the brands Featherfresh and Restivia.

The company manages the entire production cycle, including product development, design, manufacturing, distribution, and customer interaction. The company's products are supplied to cities such as Bihar, Chandigarh, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Uttar Pradesh, and Uttarakhand.

The company's financial condition appears very positive. For the fiscal year 2024-26, net profit grew by approximately 71% year-on-year, reaching 8.65 crore, and total revenue increased to 92.39 crore with a Compound Annual Growth Rate (CAGR) of about 12%. As of the end of the quarter in March 2026, the company's total debt amounted to 3.99 crore rupees, while reserves and surplus reached 12.74 crore rupees.

Last week, the combined market value of five of the ten most expensive companies decreased by 1 trillion rupees. The IT indicator TCS took the biggest hit amid an overall downward trend in the domestic stock market.

Over the past week, the BSE Sensex index dropped by 489.92 points, representing 0.62 percent, while the NSE Nifty index fell by 204.65 points, or 0.83 percent. Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted that markets closed lower due to high crude oil prices, renewed geopolitical uncertainty, and ambiguous global signals, which negatively affected investor sentiment.

Among the companies whose valuation declined were Reliance Industries, HDFC Bank, ICICI Bank, State Bank of India, and Tata Consultancy Services (TCS). However, among the top 10 companies, Bharti Airtel, Bajaj Finance, Larsen & Toubro, Life Insurance Corporation of India (LIC), and Hindustan Unilever emerged as winners. These five firms collectively added 55,149.45 crore rupees to their market value.

Specifically, TCS's market value shrank by 34,263.28 crore rupees, reaching 853,506.85 crore rupees. Similarly, Reliance Industries' valuation decreased by 31,869.13 crore rupees, amounting to 1,770,056.06 crore rupees, and State Bank of India lost 25,891.88 crore rupees, bringing its value to 985,829.96 crore rupees.

HDFC Bank's market capitalization slightly decreased by 7,165.37 crore rupees, standing at 1,120,802.10 crore rupees, while ICICI Bank reduced by 2,792.65 crore rupees, reaching 1,017,577.98 crore rupees.

Meanwhile, LIC's value increased by 26,438.49 crore rupees, reaching 523,330.31 crore rupees. Bharti Airtel's market capitalization sharply rose by 20,592.13 crore rupees, reaching 1,243,016.11 crore rupees, and Bajaj Finance grew by 3,548.79 crore rupees, reaching 677,197.34 crore rupees.

Larsen & Toubro added 2,490.66 crore rupees to its valuation, which is now 558,973.11 crore rupees. Hindustan Unilever's market capitalization increased by 2,079.38 crore rupees, reaching 490,888.35 crore rupees. Reliance Industries maintained its status as the most valuable domestic company, followed by Bharti Airtel, HDFC Bank, ICICI Bank, State Bank of India, TCS, Bajaj Finance, Larsen & Toubro, LIC, and Hindustan Unilever.

HDFC Bank is considered one of the largest companies in India's banking sector. However, in recent years, the stock performance of this bank has not met expectations. Following its merger with HDFC Ltd in 2023, the bank's size increased significantly. Nevertheless, the bank requires time to find a balance between growth and margin while managing a large balance sheet.

Investors had hoped that after the merger, HDFC Bank would improve its profitability and return ratio faster than anticipated, but the recovery has been slower than projected. Despite remaining the largest bank in the country by market capitalization, HDFC Bank faces stiff competition from ICICI Bank. Currently, the difference in market capitalization between the two banks is only about 9%.

According to Bloomberg data, on August 12, HDFC Bank's stock reached a new 52-week low, with a market capitalization of ₹11.14 trillion, while ICICI Bank's market capitalization stood at ₹10.21 trillion. State Bank of India follows them, with a market capitalization of ₹9.96 trillion as of August 12.

Pressure on HDFC Bank's shares has been steadily increasing this year. On August 12, 2026, the stock fell to a 52-week low of ₹722 during trading. The stock sentiment was influenced by weak first-quarter results, margin pressure, and continuous selling by foreign institutional investors (FIIs). At the beginning of the year, the bank's stock was trading at ₹991.

On August 13, before noon, HDFC Bank's stock traded on the NSE down by approximately 0.37%, reaching ₹726.25, and on the BSE down by 0.39%, amounting to 726.15. The bank's market capitalization on both exchanges was around ₹11.19 trillion. Compared to the market capitalization of approximately ₹15.26 trillion on January 1, 2026, the bank's value has decreased by about ₹4 trillion this year.

HDFC Bank shares have also shown weakness in August. In August 2026, the stock closed lower in 7 out of 8 trading sessions. Over the month, a decline of more than 3.5% was recorded. Previously, between July 20 and 24, the bank's shares plummeted by approximately 9.3%. This drop occurred after the release of June quarter results, which the market deemed weak compared to expectations.

In the first quarter of the fiscal year 2026-27, HDFC Bank's net profit on a standalone basis grew by 5% year-on-year to ₹19,060 trillion. However, a significant reduction in the bank's provisions raised questions in the market regarding the quality of earnings. The bank's provisions decreased from ₹14,442 trillion to ₹3,060 trillion, representing a reduction of approximately 79%. On the other hand, the bank's Net Interest Income (NII) grew by 6.7% to ₹33,534 trillion. NII is considered an important indicator of the bank's core lending business income.

One of the main concerns for HDFC Bank is the pressure on the Net Interest Margin (NIM). In the June quarter, the bank's NIM declined from 3.38% to 3.26%, which is one of the lowest figures in the bank's history. Historically, HDFC Bank's NIM exceeded 4%. Margin pressure persists even after the merger with HDFC Ltd. The primary reasons cited are the portfolio of low-yield home loans and the relatively high cost of funding.

Following the first-quarter results, the bank's shares fell by more than 5% in a single trading session on July 20. Throughout July, the shares also declined by more than 6%.

The decline in foreign investor shareholding has also impacted HDFC Bank's stock. By the end of the June 2026 quarter, FIIs held 41.82% of the bank, compared to 44.05% at the end of the March 2026 quarter. Furthermore, in the June quarter of FY25-26, the FII shareholding was 48.84%. Thus, foreign investor participation has been steadily decreasing recently. Conversely, the share of domestic institutional investors (DIIs) has increased: from 35.95% in Q1FY26 to 41.92% in Q1FY27.

HDFC Bank is not just a major banking stock; it is a crucial asset for the entire Indian stock market. Until July 31, 2026, its weight in the Nifty 50 was 10.27%, the highest among all companies included in the index. This is why a sharp fall or rise in HDFC Bank can influence the sentiment of the Nifty 50 and the broader market. Reasons for sell-offs by Indian investors include India's high valuation compared to other emerging markets, attractive bond yields in the US market, and the weakening rupee against the dollar.

The recent weakness in HDFC Bank's shares has raised concerns among investors regarding long-term returns. Over the past five years, HDFC Bank shares have yielded almost zero or negligible returns (around 3%–5%). Return calculations for any period take into account the starting date, dividends, and corporate actions.