Market capitalisation to GDP ratio scales a 15-year high of 140.2%: Report

BSE's total market capitalization had hit $4 trillion in November 2023, and has now soared past $5 trillion in just six months.

The market capitalisation (mcap) of all listed companies and traded on the Bombay Stock Exchange shot up 61 percent since the end of March 2023, compared to an estimated 10 percent growth in India’s Gross Domestic Product (GDP) at current prices in FY24, according to a Business Standard report.

India’s mcap-to-GDP ratio has hit a 15-year high of 140.2 percent, up sharply from 95.8 percent at the end of March 2023, with the total valuation of all BSE-listed companies reaching $5 trillion or over Rs 414.46 trillion on May 21 as against India’s GDP at current prices of Rs 296.6 trillion in FY24.

The current ratio is just a notch below the all-time high of 149.4 percent at the end of December 2007, the report added, quoting BSE data.

The total market capitalisation of BSE-listed companies had hit $4 trillion in November 2023, and took just six months to surpass $5 trillion. The BSE-listed companies reached the $1-trillion market cap back in May 2007, doubling in over a decade to $2 trillion in July 2017, and then reaching the $3 trillion mark in May 2021.

Similarly, the combined mcap of the Nifty 50 stocks jumped 33.2 percent in the period, from Rs 136.5 trillion at the end of March 2023 to Rs 181.8 trillion on May 21.

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Also, on May 22, markets regulator Securities and Exchange Board of India (Sebi) has decided to alter the methodology for calculating the market capitalisation of a publicly listed company. According to Sebi's fresh amendments, all listed companies will use the average market-capitalisation of six months.