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The secondary markets have delivered positive performance amidst significant volatility witnessed since the commencement of FY25 and on a longer-term basis, Indian markets have been among the best-performing markets in the world the Economic Survey 2024-25 has stated.
“The compounded annualised returns of Nifty 50 for the past ten years [since March 2014] stand at 8.8% [adjusted for USD], trailing below few indices, such as the U.S. NASDAQ composite index [15.3% and U.S. Dow Jones [9.2%] among a select set of significant markets as of December 2024,” the survey pointed out.
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“The corresponding CAGR of China’s Shanghai Composite indices stands at 3.2%. The positive performance of the Indian stock was driven by strong profitability growth, rapid traction of digital financial infrastructure, expanding investor base and substantial reforms in products and processes,” it stated.
In line with the performance of Indian markets, India’s weight in the MSCI-EM index reached a new high of 20% in July 2024 before settling down at 19.4% at the end of December 2024. This is only the third highest after China and Taiwan, the Survey highlighted.
Emphasising that the period since the pandemic has seen a surge in individual and household participation as capital market investors through direct (trading in markets through their accounts) and indirect (through mutual funds) channels, the Survey stated that healthy corporate earnings, stable macro fundamentals, trust garnered by mutual fund ecosystem and online digital investment platforms have encouraged greater participation in capital markets.
“The incremental addition to demat accounts has been continuously increasing, with the number of demat accounts rising sharply by 33% to 18.5 crore at the end of December 2024 on a YoY basis. In the equity cash segment, individual investor share turnover41 was 35.6 per cent from April to December 2024,” it mentioned.
There are 11.5 crore unique investors with demat accounts and 5.6 crore unique investors in mutual funds as of the end of December 2024, it added.
“Higher investor participation has engendered a self-reinforcing cycle of strong market returns, bringing in even more investors. This, in turn, will eventually transform the securities market into a more diverse, inclusive, and robust platform for wealth creation,” the Survey emphasised.
Notwithstanding the market volatility and geopolitical uncertainties, the primary markets continued to witness heightened listing activities and investor enthusiasm in FY25, the Survey found.
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“As per the E&Y Global IPO trends, Indian stock exchanges provide conducive market conditions for foreign conglomerates to list their local subsidiaries, thereby offering a good opportunity for unlocking value. India’s share in global IPO listings surged to 30% in 2024, up from 17% in 2023, making it the leading contributor of primary resource mobilisation globally,” it started.
“The total resource mobilisation from primary markets [equity and debt] stands at ₹11.1 lakh crore from April to December 2024, which is 5% more than the amount mobilised during the entire FY24. This also amounts to 25.6% of gross fixed capital formation of private and public corporations during FY24,” it concluded.
Published – February 01, 2025 01:18 am IST
