BLUE CHIP COMPANIES,MARKET

CAPITALIZATION

AKSHAY KUMAR P
𝟏𝑺𝑻 YEAR MBA
WHAT IS BLUE CHIP ??
WHAT IS BLUE CHIP?

A blue chip is a nationally recognized, well-

established, and financially sound company. Blue
chips generally sell high-quality, widely accepted
products and services. Blue chip companies are
known to weather downturns and operate profitably
in the face of adverse economic conditions, which
helps to contribute to their long record of stable and
reliable growth.
 > A blue chip company is a multinational firm.
It has been in operation for a number of years.
> For example, companies like Coca-Cola, Disney, PepsiCo,
Wal-Mart, General Electric, IBM, and McDonald’s which are
dominant leaders in their respective industries.
> Blue chip companies have built a reputable brand over the
years and the fact that they have survived multiple downturns
in the economy makes them stable companies to have in a
portfolio.
> Conservative investors with a low risk profile or nearing
retirement will usually go for blue chip stocks. These stocks are
great for capital preservation and their consistent dividend
payments not only provide income, but also protect the
portfolio against inflation.
What qualifies a company as
blue chip?
 In the investment world, a blue-chip company is well-
known, well-established and well-secured. It is considered to
be a leading company in its sector and produces dominant
goods or services. Generally, a blue-chip company is
impervious to economic downturns, which contributes to its
qualities of generating consistent revenues and stable growth.
It is usually considered a household name.
Where does the term blue chip
come from?
The term "blue chip" derives from poker. The simplest
sets of poker chips include white, red, and blue
chips, with tradition dictating that the blues are
highest in value.
Blue Chip Companies Marketing
Capitalization

 A blue-chip stock typically has a market capitalization in

the billions, is generally the marketleader or among the
top three companies in its sector, and is more often than
not a household name. Some examples of blue-chip
stocks are IBM Corp., Coca-Cola Co. and Boeing Co.
WHICH ARE THE BLUECHIP
COMPANIES ??
Which are blue chip companies?

 Tata Consultancy Services (TCS)

 TCS or Tata Consultancy Services is a leading name in the domain of IT services, business solutions and consulting.
It is the largest software services exporter from India. TCS has revenue of $13.4 billion the 2014-2015 fiscal year and
its net income has been estimated to be $3.1 billion. On 30 April 2015, its market capitalization amounted to Rs.
482,571.81 crore.

Reliance Industries

 When it comes to business domain in India, Reliance Industries is one of the top-notch names. The company is
involved in a wide array of businesses such as production and exploration of hydrocarbon and petrochemicals,
marketing and refining of petroleum, telecommunications and retail segment. In 2013, the company was
conferred the ‘Entrepreneur of the Decade’ by the All India Management Association. In the same year, it is also
ranked at the 107th position in the Fortune Global 500 List. On 30 April 2015, its market capitalization amounted to
Rs. 279,064.94 crore.

ONGC (Oil and Natural Gas Corporation )

 ONGC or Oil and Natural Gas Corporation Limited is regarded as the leading energy-based company in India
and the fifth of its kind in Asia. As per Platts Top 250 Global Energy Rankings, it occupies the 21st rank. On 11
February 2014, ONGC was awarded the ‘Best Enterprise Award’ at the WIPS Award of Excellence in the
Maharatna and Navaratna categories. On 30 April 2015, its market capitalization amounted to Rs. 260,086.90
crore.
ITC
ITC is one of the leading Fast-Moving Consumer Goods (FMCG) conglomerates of India. It has been able to build and sustain a
stronghold in FMCG goods, packaging, hotels, agri business, paperboards and specialty papers, and information technology
sectors. Among the many firsts achieved by ITC is the honour of being the first Indian company to have brought out its
sustainability report as per the G3 guidelines of Global Reporting Initiative – a UN-authorized entity based in Netherlands. On 30
April 2015, its market capitalization amounted to Rs. 258,380.27 crore.

HDFC ( Housing Development Finance Corporation )

HDFC or Housing Development Finance Corporation Bank was established during August 1994 and since then has expanded to
have 3659 branches across India in addition to 11,633 ATMs. It is currently active in 2287 cities and towns of India. In 2015, it was
adjudged the ‘Best Managed Public Company in India’ award by the Finance Asia Poll on Asia’s Best Companies 2015. On 30
April 2015, its market capitalization amounted to Rs. 247,842.26 crore.

Coal India
Coal India, a governmental organization, is the largest producer and reserve holder of coal in India. It produces almost 81% of
the entire coal produced in India. The organization won the ‘Indira Gandhi Rajbhasha Shield’ as a part of the Rajbhasha Award
Scheme of the Indian Government for being the leader in implementing the Central Government’s Official Language Policy
within the PSUs. On 30 April 2015, its market capitalization amounted to Rs. 229,126.12 crore.
Infosys
Infosys is one of the leading names in the world when it comes to consulting, outsourcing, technology and next-generation
services. It operates across 50 countries. In 2014-15, it earned revenues amounting to 8.7 billion dollars and at present, it employs
1,76,000 people around the world. RS. At the 2014 International Ashden Awards, it claimed the Gold Award for Sustainable
Buildings. On 30 April 2015, its market capitalization amounted to Rs. 223,062.04 crore.
Problems faced by Top Blue Chip Companies

The top blue chip companies face different

problems that are unique to their industry. For example,
the pharmaceutical companies face a lot of problems
with their documentation, especially in countries such as
the US. Some of these companies also happen to be the
leading recruiters in India and one major problem they
face is that there are plenty of people with good grades
but not the skills or capabilities needed to perform well
even at the entry level jobs that these companies offer.
Contribution to Indian Economy
Almost all the blue chip companies are the top most
companies in their respective domains – something that attests
to their immense adherence to a high standard of products and
services over the years. However, more than that, their real value
lies in the fact that they are integral parts of the service sector
that is the biggest employer in India – at least in the urban areas.
Another important aspect is that when anyone invests in any
blue chip company in the stock market, there is stability of
earnings and regular dividend payouts due to the sustained
growth achieved by these companies.