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Airtel adds $30bn to its market cap, becomes biggest wealth creator

Bharti Airtel, which barely had any upward movement for more than a decade through 2018, has emerged as the darling of Dalal Street. Since the beginning of 2024, the telecom major has added more than $30 billion to its market capitalisation. The addition in market valuation is the highest among listed companies in India and is derived from the success of its mobile business. Interestingly, more than 80% of Nifty200 companies command a market valuation, which is less than $30 billion as of Wednesday’s close. The list comprises marquee names like Wipro, Nestle India, IOCL, Tata Steel and among others.

Last week, the company also added one more feather to its cap by entering the ultra-elite club of $100 billion market cap. Currently, there are only four companies that boast a market capitalisation of at least $100 billion. While Reliance Industries (RIL) tops the list with a market valuation of $237 billion, Tata Consultancy Services (TCS) ranks second with a valuation of $166 billion. Private lender HDFC Bank commands a market capitalisation of $143 billion and occupies the third spot.

Foreign brokerage CLSA believes Bharti’s strong India mobile growth, backed by management execution, is driving this mega corporation with 562 million subscribers across 16 countries. The brokerage, which has a “buy” rating on the stock with a 12-month target price of ₹1,540 per share wrote, “Bharti’s three key drivers are its high-growth scalable business, strong management and global competitive edge.”

In 2023, HDFC Bank saw the highest addition of $46 billion in market capitalisation. However, the gigantic jump in market valuation was largely due to the merger with its housing finance company, HDFC Ltd. The second biggest wealth creator, Larsen & Toubro, witnessed an increase of $24 billion in its market valuation in 2023.

The Average Revenue Per User (ARPU) of Bharti Airtel increased by ₹16 in FY24 to ₹209. While India’s mobile and non-mobile services generate three-fourths of Bharati Airtel’s revenue, Africa contributes another 25% to the top line.

On Wednesday, shares of Bharti Airtel climbed to their record high of ₹1447.85 on the NSE. The stock has rallied as much as 39.4% between January and now, against Nifty50’s gain of 7.3% during the same period. CNBCTV18

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