After more than nine years, the market cap of BSE-listed firms has inched close to a record high in dollar terms, a peak scaled in January 2008. At Monday’s close – total market capitalisation was only $12.6 billion away from its record thanks to a stellar rally in the equity markets and appreciation in the value of the rupee against the US dollar. The rupee has gained 4.5% so far this year to hit its highest level in nearly 1-1/2 years, as the sentiment was lifted by a surge in foreign investments last month betting on government reforms and an improving economy. Overseas investors poured $5.14 billion in March alone into Indian equities, taking the total tally to $6.7 billion in 2017.
India’s market cap grew by 21% in 2017, at a faster pace compared with much of its peers. While Brazil market grew by 12.4%, China and Hong Kong increased 6% and 9.4%, respectively. Despite nearly 500 companies making debut in the primary market since 2008, market capitalization of the country’s listed firms has been below its 2008 peak due to depreciation in the value of the rupee against the US dollar. The rupee has lost more than a third of its value between 2011 and 2016.
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From Coal India to Avenue Supermarts – 443 companies got listed during the period, which together added $168 billion to the combined market value of the country, which is close to 10% of the aggregate market capitalisation.
Indian companies have contributed around $322 billion to the world market cap so far this year, and the Sensex has rallied 17.3% in dollar terms, the biggest gainer globally. The market caps of the largest private refiner, Reliance Industries, surged by $17 billion.
While HDFC Bank, ITC, State Bank of India and HDFC added anywhere between $7 billion and 12 billion to the total market cap of the country, the new entrant, Avenue Supermarts, added another $6 billion to the combined market value. However, India, the ninth-biggest equity market in the world – contributes only 2.6% of the world market capitalization of $71.6 trillion, less than 80 bps that it had contributed in October 2010.