The market capitalization of the Bombay Stock Exchange (BSE) has increased more than tenfold in the last one decade. The total market capitalisation (m-cap) of the companies listed on the exchange touched Rs 72,96,725 crore ($1,622 billion) on December 31, 2010, from around Rs 7,00,000 crore ($150 billion) at the end of year 2000.
Indian companies added m-cap of Rs 65,96,725 crore ($1472 billion) during last ten years, with the newly listed companies contributing almost 40% or Rs 25,52,692 crore. The benchmark Sensex jumped over five times or 416% from the 3,972 levels at the beginning of the decade to 20,509 as on December 31, 2010.
The benchmark indices rose for a second consecutive year, making the benchmark index the best performer among the world’s 10 biggest equity markets as economic growth lured record foreign funds. The BSE benchmark index Sensex rallied 17% in last year, extended previous year’s biggest rally in 18 years.
Global funds bought a net of $90.17 billion (Rs 4,05,092 crore) since 2001, taking net flows into equities to $101.97 billion (Rs 4,47,104 crore), according to data on the Securities and Exchange Board of India website. The strong net inflows by the foreign institutional investors (FIIs) and healthy economic growth helped the country to post robust growth during the decade.
“The sovereign upgrade for India (and downgrade for western economies) will generate great appetite for Indian capital market assets. India is considered as one of the best safe-haven economies,” said Moses Harding, Executive Vice President & Head – Global Markets Group, IndusInd Bank.
India currently ranks at number eight in world market capitalisation ranking and has notched up nine positions in the last seven years, the Bloomberg data shows. After ranking at eighteen positions in 2003, we have overtaken Germany, Australia, Switzerland, Italy, South Korea, Taiwan, Spain, Sweden and Netherlands during the journey.
Half of the listed stocks appreciated over 500% during the decade. Out of 1,755 actively traded stocks in the last one decade, as many as 503 stocks appreciated more than 1000% and 312 stocks rose in the range of 500-1000%.
Among the frontline A group stocks, Unitech, United Phosphorus, Jindal Steel and Power, Lupin, Sesa Goa, Jai Corp, Aban Offshore, Crompton Greaves and Shriram Transport Finance have zoomed more than 10,000% or 100 times.
However, most technology and entertainment stocks, including Ketan Parikh’s favorite companies such as PVP Ventures (formerly SSI), Pentamedia Graphics, Himachal Futuristic, Silverline Technologies, Software Technology and Mascon Global shed over 95% from their 2000 levels.
Power and metal jumped over 50 times, while IT and pharma were up less than 6 times. Going by sectoral classification, the market wealth of banks, financial, power, steel, engineering, non-ferrous metal, electrical equipment, constructions, automobiles and oil exploration rose more than 15 times, while refineries, information technology, pharmaceuticals, telecommunication and fast moving consumer goods saw less-than-tenfold jump in market capitalization in the last one decade.
Among the business houses, Tata, Adani, Anil Agarwal promoted Vedanta, O P Jindal group, UB group, Anil Dhirbhai Ambani group and Munjal group have seen over tenfold jump, while the Mukesh Ambani-promoted Reliance group, A V Birla, Mahindra and Mahindra and Shiv Nadar group reported a mere single-digit growth in group market capitalizations in last one decade.
“Indian capital markets had eventful and exciting times during the past decade. Considering the growing stature of India on the global front, one can expect that the coming decade will also be equally fruitful for India,” said Jagannadham Thunuguntla, Strategist and Head of Research, SMC Global Securities.