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 The Indian capital market is projected to see 17-45 per cent compound annual growth rate (CAGR)-sustained revenue growth over FY24-27, a Motilal Oswal Financial Services Ltd (MOFSL) report said on Tuesday. 

The entire ecosystem of capital market – asset management companies (AMCs), brokers, exchanges, intermediaries and wealth managers – will see sustained growth in revenue during the period

Fixed cost nature will drive operating leverage for all segments, resulting in superior profit growth, said the report, adding that high cash generation, healthy dividend payouts, and superior return on equities (RoEs) bolster MOFSL’s view in the entire capital market space.

“The remarkable growth of the Indian Capital market in the past five years marks the beginning of a sustained, multi-year structural uptrend, fuelled by favourable demographic trends as more individuals enter the workforce, contributing to the expansion of the middle class,” the report emphasised.

Digital enablers such as E-KYC, UPI and Account Aggregation have played a key role in facilitating this growth and regulatory reforms have further strengthened the ecosystem, enhancing transparency and security for investors.

Consequently, AMCs, exchanges, brokers, wealth managers, and other intermediaries are well-positioned to capitalize on these emerging trends, the report mentioned.

In the past five years, demat accounts surged 4.4 times (179 million), NSE active accounts surged 4.9 times (49 million), Unique MF investors jumped 2.4 times (50 million), and monthly SIPs climbed 3.2 times (Rs 253 billion) from FY20 till October 2024.

According to the report, over the next decade, the demographic dividend will accelerate, with over 100 million people joining the workforce and about 100 million households entering the middle-income class.

With robust economic growth, the number of HNIs and UHNIs has been growing in India (at 12 per cent CAGR), and their wealth is growing at a faster pace, aided by buoyant equity markets, said the report.