The BSE listed companies had a minimum market cap and GDP ratio of 2005.
GDP to m-cap ratio: The total market cap of BSE listed companies has exceeded the country’s GDP ratio. It was last seen in September 2010. In March 2007 it was also at a record level.
- January 15, 2021, 1:06 PM IST
The market cap of BSE reached Rs 197.7 lakh crore on Thursday. As of December 2020, the country’s nominal GDP at current price is 190 trillion rupees (Nominal GDP). This figure of GDP is based on the Advance Estimates for FY 2021 by the National Statistics Office (NSO). This government agency has projected GDP at 11 per cent on a year-on-year basis in the second half of the current financial year. However, there was a contraction of about 20 per cent in the first half.
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Market cap of BSE listed companies 75% since March 2020According to NSO estimates, the nominal size of India’s GDP in the current year will be around 195 trillion, which is lower than the market cap of all the companies listed in the BSE. Let us know that from March 2020 till now, the market capitalization of BSE listed companies has shown an increase of about 75 percent.
It is to be kept in mind that countries like America, England, Japan, France and Switzerland have m-cap to GDP ratio of more than 100 percent. At the same time, the m-cap to GDP ratio of Germany, China, Brazil and Russia is less than 100 percent.
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Experts believe that 100 percent or more of m-cap to GDP ratio is a sign of caution for investors. UR Bhat, director of Dalton Capital, says that unlike developed markets, a small proportion of GDP is seen in the stock market in a country like India. The total earnings of all listed companies are less than 50 percent of the country’s GDP. Whereas in developed markets it is around 100 per cent.