India’s market cap is currently the 5th largest globally ($4.5 trillion). The US ($44.7 trillion), China ($9.8 trillion), Japan ($6 trillion) and Hong Kong ($4.8 trillion) are at present ahead of India in the market cap race. India is expected to become 3rd largest economy by 2027, and the market cap will hit $10 trillion by 2030, a report from Pantomath group stated.
Indian Economy in FY24
In FY2024, the Indian equity market witnessed a phenomenal performance as benchmark indices soared to unprecedented all-time highs, with the Nifty and Sensex scaling milestones of 22,526.60 and 74,245.17 mark respectively.
Indian equity emerged as one of the best-performing markets in the last four years. Indian Market ended time-wise correction in March 2023 last year and then started to rally & continued its strong momentum till now. On the other hand, broader indices outperformed; the NSE Midcap 100 and NSE Smallcap 250 advanced around 60.06% and 63.07%, respectively, in FY2024 till now. India’s market cap reached $4.5 Trillion as of February 2024.
The Indian corporate earnings began to show improvement, with companies benefiting from a softening in commodity prices, leading to enhanced profitability and margins. Companies are expected to continue strong performance in the upcoming quarters, driven by a robust domestic demand environment, positive macroeconomic factors and private capex revival. It’s a positive trigger for Indian equity markets. The year we witnessed robust Industrial Production (IIP) growth and favorable PMI data, indicating an expansion in output at an above-trend pace.
The manufacturing sector sustained its growth momentum, driven by a consistent inflow of new orders. Many companies experienced a notable uptick in sales during the festival season. While the Consumer Price Index (CPI) started to moderate from its peak levels, it remained above the Reserve Bank of India’s comfort range of 2% to 4%. Concerns about inflation persist, particularly in relation to the risk of an increase in food inflation, according to the RBI. The government aims to proactively address supply issues to prevent sharp spikes in food and vegetable prices.
Lok Sabha Election in 2024 and RBI Interest Rate Cut
Moving ahead in FY2025, the focus will be on the Loksabha elections, with a hope of continuation of economic reforms and policies as the ruling government is expected to retain power. This outcome instils confidence in both domestic and global investors, encouraging long-term investments in the Indian equity markets, given the anticipated continuity of policies and reforms. Ruling government retaining the power would also benefit the Indian economy’s objective to achieve a $5 trillion GDP soon.
RBI might consider rate cuts in the second half of FY2025, contingent on overall inflation and the monetary policy stances of global central bankers.
Indian IPO Market In FY24
The Indian IPO market has been on an upward trajectory, witnessing remarkable growth and emerging as a global hotspot for companies seeking to raise capital. In the fiscal year 2023-24 (FY24), a staggering 76 companies tapped into the public markets through mainboard IPOs, raising nearly ₹62,000 crore – a 19% increase compared to the previous fiscal year.
The average first-day gains stood at 28%. Meanwhile, over 70% or 55 stocks, are still trading above their issue price. The gains can be attributed to several factors. The buoyant secondary markets, the enthusiastic participation of retail investors in IPOs, and the strong flows from institutional investors played a significant role in these gains.
Indian IPO Market In FY25
The IPO market is buzzing with anticipation as a multitude of innovative and captivating offerings are poised to hit the market, buoyed by India’s robust economic growth. With FY2025 on the horizon, expectations are high for yet another stellar year for IPOs. This optimism is fuelled by a confluence of factors, including the surge in domestic capital, enhanced governance practices, the vibrant spirit of Indian entrepreneurship, and favourable government policies bolstered by FDI support. Moreover, the landscape is enriched by the rising tide of financial literacy and the unwavering commitment of institutional investors.
In the above backdrop, IPO activity will be resurgent, driven by a combination of factors. Companies that had previously deferred their IPO plans are now poised to make their debut, capitalizing on favorable market conditions. Anticipating a surge in demand and backed by robust market practices, both domestic and foreign investors are showing keen interest in primary markets, setting the stage for a flurry of new listings.
(The above inputs are solely from the report of Pantomath group titled ‘Recap 2024 . Crystal Gaze 2025’)
