State Bank of India (SBI) has entered India’s top tier of listed companies by market capitalisation, surpassing Tata Consultancy Services (TCS) to become the fourth most valuable firm on Dalal Street. The shift comes after a strong rally in PSU banking stocks, driven by SBI’s better-than-expected December-quarter earnings, improved asset quality and positive outlook on credit growth.

According to the latest market data, the top listed Indian companies by market capitalisation are:

  • Reliance Industries Ltd – around Rs 19.7–19.9 lakh crore
  • HDFC Bank Ltd – roughly Rs 14.2–14.5 lakh crore
  • Bharti Airtel Ltd – about Rs 11.4–11.5 lakh crore
  • State Bank of India – near Rs 10.9–10.94 lakh crore
  • Tata Consultancy Services – around Rs 10.5–10.53 lakh crore
  • ICICI Bank Ltd – about Rs 10.1–10.2 lakh crore

SBI first overtook TCS for the fourth position, and ICICI Bank also briefly edged past the IT major as technology stocks came under pressure. During Thursday’s trade, TCS shares fell more than 5% before noon, while SBI gained over 1% and ICICI Bank rose about 1.5% on the NSE.

This marks the first time in around 15 years that SBI has moved ahead of TCS in market value. The rally in SBI reflects renewed investor confidence in domestic banking plays, particularly as India’s credit cycle strengthens and capital expenditure and consumer demand remain resilient.

At the same time, India’s technology sector witnessed a sharp correction. The Nifty IT index dropped over 4% to a four-month low, wiping out nearly Rs 1.3 lakh crore in market value. TCS, Infosys and Wipro each fell more than 4%, while HCL Tech and Mphasis also declined between 4% and 5%. The total market value of IT stocks in the Nifty IT index fell to about Rs 27.6 lakh crore.

TCS saw its market capitalisation slip below Rs 10 lakh crore as its stock hit a yearly low of Rs 2,776 during the session.

The sell-off was triggered partly by the launch of Claude Cowork by US-based AI firm Anthropic. The AI tool is reported to be capable of handling legal tasks such as contract reviews and compliance work, areas traditionally serviced by IT companies. Jefferies described the development as a “SaaSpocalypse”, highlighting concerns that AI could replace parts of the traditional IT services model rather than merely enhance productivity.

Dr V K Vijayakumar of Geojit Investments said, “Tech stocks, reeling under the Anthropic shock, are unlikely to recover soon.” Some market estimates suggest companies could face revenue pressure of up to 40% if AI significantly reduces demand for conventional outsourcing services.

Further pressure came from strong US labour market data showing 130,000 new jobs and unemployment at 4.3%. The data reduced expectations of an early interest rate cut by the US Federal Reserve, which typically weighs on technology stocks.

Thomas Shipp of LPL Financial said, “The fear with AI is that there’s more competition, more pricing pressure, and that their competitive moats have gotten shallower, meaning they could be easier to replace with AI.”

Motilal Oswal cautioned that AI could make older software and testing services less relevant but suggested that investors watch for AI partnerships over the next three to six months, which may lead to new AI-driven service deals by mid-2026.

The latest reshuffle signals a possible broader shift in investor preference towards domestically focused sectors such as banking and telecom, with three banks — HDFC Bank, SBI and potentially ICICI Bank — now dominating the top five alongside Reliance Industries and Bharti Airtel.

SBI’s climb also highlights its turnaround from earlier bad-loan challenges to its current status as a blue-chip banking heavyweight, at a time when India’s IT sector faces structural questions over AI-led disruption.

(Disclaimer:The recommendations, views and opinions expressed by market experts are their own and do not represent the views of this publication. Stock market investments are subject to market risks. Readers are advised to consult certified financial advisers before making any investment decisions.)