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India\u2019s largest listed firms now hold a smaller share of the stock market compared to their American counterparts, as a broader spectrum of Indian companies and a shift away from commodities reshape its market landscape, contrasting sharply with the US\u2019s increasing focus on technology giants.<\/p>\n<\/div>\n
India\u2019s biggest listed companies now account for a smaller slice of the stock market than their American counterparts, even though the two markets have moved in opposite directions over the past five years. An analysis of National Stock Exchange Market Pulse data shows India\u2019s Herfindahl-Hirschman Index, a standard measure of concentration, falling from 167.9 in 2020 to 80.9 in 2025, while the US score climbed from 95 to 164 over the same period.<\/p>\n
The divergence points to a more dispersed Indian market and a more top-heavy American one. In the US, concentration has been pulled higher by the extraordinary rise of large technology groups, whose scale and market dominance helped turn Microsoft, Nvidia, Alphabet, Amazon, Apple, Meta and Tesla into the so-called “Magnificent Seven”. Japan, by contrast, has also seen concentration ease, with its HHI slipping from 83.9 to 75.9 over the same period.<\/p>\n
The Indian market\u2019s shift has been shaped by a broader mix of listings, especially a surge in initial public offerings, which has widened the field of publicly traded companies. The Business Standard analysis also notes that India has moved away from a commodities-led structure: materials accounted for 25 per cent of market capitalisation in 1995, while financials now represent 25 per cent, with industrials, consumer discretionary and information technology also making up a larger share.<\/p>\n
Joshy Jacob of the Indian Institute of Management, Ahmedabad, argued that the structure of India\u2019s leading companies helps explain why market-cap concentration has eased. India\u2019s top 10 firms are dominated by banks, energy groups, IT services companies and fast-moving consumer goods businesses, many of which are capital-heavy and harder to scale rapidly than software or platform businesses. He said the country\u2019s growing number of tech-native start-ups and mid-caps has also helped spread market value more evenly, even as concentration in business revenues has increased.<\/p>\n
Jacob said the US pattern is different because the market has been reshaped by two-sided platforms, intangible-heavy businesses and technology companies with powerful moats and global reach. He said their market capitalisation has become detached from revenue concentration because investors are pricing in faster growth and unusually strong margins. He added that India\u2019s future trajectory may depend on new listings and the continued expansion of recently listed tech-native firms.<\/p>\n
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