India's market-capitalisation to GDP ratio hits 15-year high of 140%: Report

In a significant development, the market capitalisation of all BSE-listed companies is up 61% since end of March 2023, as compared to an estimated 10% growth in India's GDP at current prices in FY24 As per a report by Business Standard, India's market-cap to GDP ratio has hit a 15-year high of 140%, a sharp rise from 95.8% at the end of March 2023.

Quoting BSE data, the report further added that this ratio is just slightly lower than the all-time high of 149.4% at the end of December 2007

Mcap vs GDP

On May 21, the market capitalisation of BSE listed companies hit $5 trillion or over Rs 414.46 trillion over India’s GDP at current prices of Rs 296.6 trillion in FY24. In December 2007, when the ratio hit an all-time high, he combined mcap of all BSE listed and traded companies had reached Rs 71.7 trillion compared to India’s GDP at current prices of Rs 48 trillion during the trailing four quarters ending December 2007.

The Business Standard report further mentioned that a sharp correction in equity prices followed the record mcap-to-GDP ratio. Over the next 15 months, he ratio declined nearly two-thirds to a low of 54.8% at the end of March 2009.

Market capitalisation timeline

BSE's total market capitalisation hit $4 trillion mark in November 2023 and has soared past $5 trillion in just six months. The BSE listed stocks hit the trillion mark for the first time in May 2007, doubling n over a decade to $2 trillion in July 2017, and then reaching the $3 trillion mark in May 2021.

At present, only four stock markets around the world have market capitalisation over $5 trillion in 2023. The US leads with a market cap of almost $55.65 trillion, followed by China ($9.4 trillion), Japan ($6.42 trillion), and Hong Kong ($5.47 trillion).

Also watch: Stock market hits $5 trillion for the first time ever; benchmark indices end flat on Tuesday