India's market capitalisation to GDP ratio at 15-year high of 140%

The stock market capitalization (mcap) of companies listed on the Bombay Stock Exchange (BSE) continues to grow at a faster pace than India's gross domestic product (GDP). As of Tuesday, the combined mcap of the 4,357 companies available for trading on the BSE was around US$ 4.9 trillion (Rs. 416 trillion). This is compared to India's estimated GDP of US$ 3.5 trillion (Rs. 296.6 trillion) for the 2023-24 fiscal year.

The current mcap-to-GDP ratio of 140.2% is just slightly below the all-time high of 149.4% recorded at the end of December 2007. At that time, the total mcap of BSE-listed companies was US$ 850 billion (Rs. 71.7 trillion), while India's GDP was US$ 574 billion (Rs. 48 trillion) over the previous four quarters. In conclusion, the stock prices of Indian listed companies have risen much faster than the overall growth in the Indian economy, leading to the market capitalization exceeding 140% of the country's GDP, close to an all-time high level.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.