Can we reach the previous high made on 08th Jan 2008?

Sensex closed at 20,873 on 08th Jan 2008. During the time of my analysis on 22nd Jan 2010, Sensex is at 16700. It is down 20% over the last two years. To find the biggest beneficiaries of the period, it is better to look at market cap. Reason why? Because Sensex considers free float market cap of companies and there has been quite a bit of equity dilution for many Sensex companies.

No points for guessing who the winner is. Hero Honda (136%), M&M (56%) and Maruti (52%) from the Auto pack appear in top five. Inspite of its debt pain, Tata Motors has gained 32%. The big run up since H2 of 2009 brought IT among top gainers. Infosys (57%), TCS (54%) and Wipro (45%) made money for investors. Sun Pharma had been the darling with a return of 33% over the period under consideration. The Rahul Dravid of Sensex, HDFC Bank has gained 27% while its peers like SBI gained a mere 2% and ICICI Bank lost 37%.
(Refer to Figure 1)

HUL & ITC which are considered defensive bets were up only 6-7% each. RCom is the biggest loser. It is down 78%. Its peer Bharti Airtel is down 35%. Real estate major DLF is down 69%. Big brothers RIL & L&T are down 23% and 30% respectively.
(Refer to Figure 2)

During the period there has been quite a bit of equity dilution. Thanks to QIPs, conversion of FCCBs et al. Look at this stats:

The market cap of Hindalco is up 18% while the stock price is down 17%.
The market cap of Tata Motors is up 32% while the stock price is up 1%.
The market cap of HDFC Bank is up 27% while the stock price is down 3%.
The market cap of M&M is up 56% while the stock price is up 35%.
The market cap of Tata Steel is down 15% while the stock price is down 30%.
(Refer to Figure 3)

Can we reach the previous high?
The answer is in the questions:
Can Reliance Industries which has a weight of 13% go up 23% from here?
Can ICICI Bank which has a weight of 7% go up 37% from here?
Can L&T which has a weight of 6% go up 30% from here?
Can HDFC which has a weight of 5% go up 21% from here?
Can Infosys which has a weight of 10% sustain at these levels?
Can HDFC Bank which has a weight of 5% sustain at these levels?

With President still finding a solution to US's eternal problems, noises about Chinese asset bubble and our dependence of earnings on global economy the probability looks low! Well, these are markets and funny things happen!