IGI Logo

India's market capitalisation grew at 11 per cent over CY12-CYTD23, much faster than GDP, facilitated by financialisation of savings, new tech enablers (fintech / discount brokers) and improved retail participation (SIP culture, demat a/cs at a record 115mn, JM Financial Institutional  Securities said in a report.

India is now a $US 3 tn plus economy. GDP grew at 6.4 per cent over the past decade, making India one of the world's fastest-growing large economies, and it is poised to grow by 6 per cent over the next five years.

Retail and HNI participation is now 69 per cent of NSE's cash market turnover as compared to 58 per cent in FY16. The total market cap of companies in India stands at $ 3.5tn (as on June 30, 2023), with indicators such as Mcap / GDP ratio (India at 93 per cent vs 183 per cent of US) and turnover to Mcap (India at 50 per cent vs US at 148 per cent) pointing towards a long growth runway.

Capital market penetration will continue to rise, aided by structural tailwinds such as a strong GDP growth (pegged at 6 per cent in the next few years), financialisation of savings with equity investing picking up, currently 8 per cent of savings, discount brokers driving higher retail participation, and increased market depth via regulatory push (slashing promoter holding, the report said.