The country’s GDP and equity MCAP ratio is quite high due to high valuations.

Mumbai: Despite widespread improvement in the Indian stock market in the last one month, the country’s market cap to gross domestic product (GDP) ratio is seen high. The GDP to market cap ratio currently stands at 148 percent against the ten-year average of 94 percent, the third highest ever.

The GDP to market cap ratio stood at an all-time high of 154 per cent at the end of September of the current year. According to a research firm report, the current amount is the third largest after December 2007 and September of the current year. September of the current year saw the total market cap of BSE listed stocks reach Rs 474.40 trillion, while the country’s GDP figure at the end of September stood at Rs 307.90 trillion.

The combined market cap of stocks listed on BSE is currently seen at over Rs 453.50 trillion. The country’s market cap has grown faster than GDP for seven consecutive quarters since the June 2023 quarter.

The ratio of market cap to GDP is seen to be higher in larger economies. The report said that as a result of high valuations of equities in the Indian markets, the market cap continues to remain high.