Riding on the back of stellar performances by companies like Tata, Adani, SBI and Reliance, India’s market capitalization to GDP ratio in FY21 is higher than the long-term average of 77%
Indian companies have had a strong showing in recent months despite the resurgence of the COVID-19 pandemic. The market capitalization of BSE firms hit $3 trillion in May following a splendid performance by companies like Reliance, Infosys and Tata. Additionally, the market capitalization to Gross Domestic Product (GDP) ratio hit a decadal high of 103.47%.
The contraction of the economy seems to have left Indian companies unfazed as they continued to rally. Eight companies added a total of Rs 1.39 lakh crore to their market valuation as the stock market made valuable gains. Reliance Industries Ltd, Tata Consultancy Services and Infosys were the top gainers as their market valuations rose to Rs 13,28,049.94 crore, Rs 11,63,018.74 crore and Rs 5,98,604.10 crore, respectively.
Other gainers include HDFC, Adani and SBI. The shares of the nation’s top lender jumped to new highs, pulling its market capitalization to just 4% short of the Rs 4 trillion marks. Owing to a strong quarterly performance, SBI stocks have gone through the roof, registering an increase of 21%. The bank’s excellent record during the pandemic has surprised many, especially foreign institutional investors who may be looking to invest in it.
Riding on a spectacular wave of recent successes is the Adani Group. Its shares blew past the benchmark index in May and resulted in the group’s market capitalization crossed the trillion mark and hit Rs 1.52 trillion. The group’s market cap has almost doubled since the new year began and witnessed a jump of at least 6.5 times in market capitalization since the pandemic hit in March 2020.
Riding on the back of stellar performances by companies like Tata, Adani, SBI and Reliance, India’s market capitalization to GDP ratio in FY21 is higher than the long-term average of 77%. Interestingly, BSE’s record market capitalization comes at a time when FIIs have been letting go of Indian equities. The sudden change in fortune is sure to draw the attention of potential investors as the market comes around.