$4 trillion m-cap! NSE-listed companies’ market cap increased 17.5% CAGR

As the total market capitalization of all NSE-listed firms hit $4 trillion or over Rs 334.7 lakh crore, the market cap of these companies increased at a compounded annual growth rate (CAGR) of 17.5% in the last 10 years. Meanwhile, the Nifty 50 index delivered 14% CAGR in the last 10 years and 14.9% in the last 20 years.

While Nifty is up over 11% so far in the calendar year, India’s m-cap has increased by about Rs 55 lakh crore in 2023, led by the outperformance of small and midcap stocks as well as a flood of IPOs on Dalal Street. India had joined the coveted $3 trillion club in May 2021.

The journey of market capitalization of Indian listed companies from $2 trillion (July 2017) to $3 trillion (May 2021) took about 46 months, whereas the last $1 trillion i.e., from $3 trillion to $4 trillion took only about 30 months.

While the $4 trillion market capitalization is an important milestone, data suggests that only 0.35% of the total private companies registered with the Ministry of Corporate Affairs, Government of India are listed on the Exchanges, indicating an enormous number of companies which can tap the equity market for their funding needs.

In the current financial year as of October 2023, more than Rs 5,00,000 crores have been mobilized through primary markets across equity and corporate bonds.

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While India ranks amongst the top 5 nations based on market capitalization, the market capitalization of listed companies on NSE to India’s GDP stood at 1.18 or 118%, which is lower as compared to developed markets such as the United States of America or Japan.
The daily average turnover has seen a year-on-year growth of 27% in the equity segment and 5% in equity derivatives in this financial year as compared to the previous financial year. In the last 10 years, the equity segment’s daily average turnover has increased by over 6 times, and that of equity derivatives’ daily average turnover has increased by over 5 times.Sriram Krishnan, Chief Business Development Officer, NSE said, “NSE listed companies’ market capitalization surpassing the $4 trillion mark is an important milestone in the country’s journey towards the $5 trillion economy. The positive sentiment in the economy has provided a thrust to the capital markets.

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