Among the many arguments being made, bulls like to point out to two key factors: The first, that combined market cap of the BSE and NSE to overall India's GDP remains well below the previous record highs hit in 2007.
* Live: BSE Sensex
The second argument is a simple look at price-to-earnings, which shows the MSCI India trading at 14.3 times forward earnings, well below the 23 times in 2007.
However, bears are bracing for a strong bout of volatility, especially when India kicks off elections next month while the global risk environment remains uncertain.
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To these bears, the spike in volatility is best evidenced by a spike in India's VIX, often called a fear gauge that has accompanied the Nifty's record-setting rally.
Both BSE Sensex and NSE Nifty rallied today to their all-time high in morning trade on fresh buying, mainly in realty, metal, auto, refinery and power sector stocks on persistent foreign capital inflows amid higher Asian cues.