SBI Becomes India’s No.2 Bank By Market Cap, Overtakes ICICI Bank In Q4

State Bank of India overtook ICICI Bank in market capitalisation during the January–March quarter, emerging as India’s second-largest lender by market value, according to data from S&P Global Market Intelligence.

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The shift in rankings came despite a marginal 0.3% decline in SBI’s market capitalisation to ₹9,040.47 billion. In comparison, ICICI Bank recorded a sharper correction of over 10% during the quarter.

Broad-Based Pressure On Banking Stocks

There was a sharp decline in the valuation of banks during the quarter. Data showed that 18 out of the 20 largest listed banks in India saw a fall in market capitalisation.

The decline coincided with a broader market sell-off amid geopolitical tensions in West Asia, including the Iran-U.S. conflict. The volatility impacted investor sentiment across global financial markets.

Foreign portfolio investors (FPIs) also turned net sellers during March. According to the Reserve Bank of India's monthly bulletin, overseas investors sold $10.8 billion worth of Indian equities through March 18.

Global And Domestic Factors Weigh

Indexes for global banking were under continuing downward pressure during the period due to the risk factors associated with geopolitics and risk-off actions. This was evident in both private and public banks operating in India.

In terms of individual stock performance, the biggest fall in market cap was witnessed by IDBI Bank, which fell by 40.3% to ₹661.27 billion. IDFC First Bank followed, declining 31.2% after a strong performance in the previous quarter.

HDFC Bank Retains Top Position

Despite a decline in valuation, HDFC Bank retained its position as India’s most valuable lender. Its market capitalisation fell 26.1% during the quarter to around ₹11,261 billion.

The stock faced pressure following the resignation of its part-time chairman, Atanu Chakraborty, on March 18, as disclosed by the bank.

Outlook On Bank Performance

According to a research note by Nomura dated April 5, SBI is expected to report relatively stable net interest margins (NIMs) for the March quarter compared with its public sector peers.

The report added that ICICI Bank may see a marginal decline of about 2 basis points in its NIM on a quarter-on-quarter basis in Q4 FY26.

The change in rankings highlights the impact of market-wide corrections and capital flows on bank valuations, with SBI moving up despite limited downside compared to peers during the quarter.