In the past three months, India’s overall market capitalisation has gained 8.82%, the highest growth among the top 10 markets. Currently, India contributes 3.61% of the world’s market capitalisation, which has increased from 3.37% at the beginning of the year.
The surge in market capitalisation of BSE-listed companies was due to a sharp bounce-back in Adani group stocks, which added nearly ₹1.05 lakh crore in market capitalisation in the last two trading sessions. Also, in the past three months, several stock market debutants have added nearly ₹2.4 lakh crore in market capitalisation. The surge in market capitalisation points to the growing investor confidence in India’s prospects but money managers advise caution in the near term.
“The next decade represents a golden opportunity for India, and our GDP is likely to grow manyfolds from the current levels,” said Siddhartha Bhaiya, founder and director of Aequitas Investments. “And while the market will continue to do well in the long run, people must exercise a little caution in the short term given the frothy valuations.”
The US too witnessed a substantial increase in market capitalisation since the beginning of the year. Led by a 16.37% gain in market value since January, the US now holds a share of 44.74% in the global market capitalisation, up from 41.62% at the start of the year. India’s market cap to GDP ratio is currently 113%, in contrast to the US, which has a ratio of 188%.
“The growth juggernaut of India continues, with BSE-listed companies surpassing $4-trillion market cap,” said Alok Agarwal, head, quant at Alchemy Capital Management. “With the nominal GDP itself expected to grow in double digits, the outlook for Indian equities continues to remain positive.”
