NSE M-Cap Surpasses USD 5 Trillion with Last USD 1 Trillion Achieved in Just 6 Months

The market capitalization of Indian listed companies on the National Stock Exchange (NSE) soared past the USD 5 trillion mark (Rs 416.57 trillion). This monumental achievement reflects the dynamic growth of India’s equity market. On the same day, the Nifty 50 Index reached an unprecedented high of 22,993.60, while the Nifty 500 Index also hit an all-time high of 21,505.25. These milestones indicate that the growth in the equity market is not confined to large-cap stocks alone.

Rapid Growth in Market Capitalization

The journey of Indian listed companies’ market capitalization has been remarkable. The leap from USD 2 trillion in July 2017 to USD 3 trillion in May 2021 took approximately 46 months. The subsequent increase to USD 4 trillion by December 2023 took about 30 months. The most recent addition of USD 1 trillion was achieved in just 6 months, highlighting the accelerating growth of the Indian market.

Top Performers

The top five companies by market capitalization are:

1. Reliance Industries Limited
2. TATA Consultancy Services Limited
3. HDFC Bank Limited
4. ICICI Bank Limited
5. Bharti Airtel Limited

Impressive Returns and Asset Growth

Over the last decade, the Nifty 50 Index has delivered a compound annual growth rate (CAGR) of 13.4%. During the same period, domestic mutual fund assets under management (equity and debt) surged by 506%, growing from Rs 9.45 trillion in April 2014 to Rs 57.26 trillion in April 2024. Similarly, Foreign Portfolio Investors (FPIs) saw their assets under management (equity and debt) increase by 345%, from Rs 16.1 trillion in April 2014 to Rs 71.6 trillion by April 2024.

Broad-Based Market Growth

The expansion in market capitalization is widespread, not limited to the top companies. Currently, the constituents of the Nifty 100 Index account for 61% of the total market capital, down from 74.9% in April 2014. This indicates a more diversified growth across various stocks. Additionally, resource mobilization by corporates, including Small and Medium Enterprises (SMEs), in the primary market has been robust, offering an effective alternative to traditional fundraising methods.

Enhanced Liquidity in the Secondary Market

Liquidity in the secondary market has seen significant improvement. The daily average turnover in the equity segment has increased by over 4.5 times, from Rs 17,818 crores in FY15 to Rs 81,721 crores in FY24.

Vision for the Future

This achievement is a testament to the vision outlined for the Amrit Kaal, which encompasses a technology-driven and knowledge-based economy, robust public finances, and a strong financial sector. The rapid increase in market capitalization within a mere six months reinforces investor confidence in the Indian economy’s future.

The NSE, as a premier Market Infrastructure Institution, will continue to provide top-tier market infrastructure and a robust platform for investors and issuers alike. This will support the crucial aspect of capital formation in the country, ensuring sustained growth and development.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.