Bombay Stock Exchange Market Cap Crosses US$3 trillion mark

The record number marks a remarkable comeback for the market whose capitalisation had dropped to below US$1.5 trillion in March 2020 following the first wave of the Covid 19 pandemic which led to panic selling.

May 28, 2021

This makes India the world's eighth-largest stock market after the US, China, Hong Kong, Japan, UK, France and Canada.

Over the past two decades, the market capitalisation of Indian markets has increased at a compounded annual growth rate of 18.2 percent.

The BSE had first achieved the US$1-trillion m-cap mark in May 2007, doubling it 10 years later with the last US$1-trillion coming in just the last four years.

The market cap crossed the US$3 trillion mark ahead of the country’s gross domestic product (GDP) which is expected to reach there by the end of 2021.

The market capitalisation of the Bombay Stock Exchange (BSE), the oldest stock exchange in Asia, crossed the US $3 trillion mark for the first time this week. Market cap refers to the combined market value of all listed companies on the exchange which was set up in 1875. This makes India the world’s eighth-largest stock market after the US, China, Hong Kong, Japan, UK, France and Canada. With many large Indian companies in the public sector slated for disinvestment in the near term, that number is expected to rise further depending on the market movement. 

Announcing the achievement, BSE CEO, Ashish Chauhan, complimented the 6.9 crore+ registered investors, 1400+ brokers, 69,000+ mutual fund distributors and the 4700 + companies that have been a part of this journey.

According to a report by the independent think tank, the Observer Research Foundation, over the past two decades, the market capitalisation of Indian markets has increased at a compounded annual growth rate of 18.2 percent. For context, when markets opened in the new millennium on 3 January 2000, the Sensex ended the day at 5375. Twenty one years later, at the time of writing this piece, it was at 51390. Along with this rise has come an increasing depth of the markets as also a secularisation of participation as more and more individuals besides institutions have started participating in its activities. The BSE had first achieved the US$1-trillion m-cap mark in May 2007, doubling it 10 years later. The last US$1-trillion has come in just the last four years.

The record number also marks a remarkable comeback for the market whose capitalisation had dropped to below US$1.5 trillion just over a year ago in March 2020 following the first wave of the Covid 19 pandemic which led to panic selling. 

Significantly, the market cap crossed the US$3 trillion mark ahead of the country’s gross domestic product (GDP) which is expected to reach there by the end of 2021 according to estimates by the International Monetary Fund. Based on current figures, the market capitalisation to GDP ratio stands at 112 percent.