look news india
While the market capitalisation of companies listed on the BSE crossed the Rs 5 lakh crore mark for the first time on Tuesday, the growth rate in share prices of all listed companies has far outpaced the country's GDP growth rate. Share prices of companies listed on the BSE have registered an average growth of 61 per cent since April 1, 2023, as compared to the country's GDP growth rate of 10 per cent at current prices in the financial year 2023-24. As a result, the country's m cap to GDP ratio has reached the level of 140.2 per cent, the highest in the last 15 years. As of March 31, 2023, this ratio was 95.8 per cent, a significant increase in a year.
According to data available on BSE, the market capitalisation of all 4,357 companies listed on this stock exchange as of Wednesday's closing price was Rs. 416 lakh crore. In comparison, the total GDP figure calculated on the basis of current prices in 2023-24 is Rs. 297 lakh crore. Therefore, the country's M cap and GDP ratio is currently 140.2 percent. Earlier, this ratio was at a high of 149.4 in December 2007. At that time, the M cap of all companies listed on BSE was Rs. 71.7 lakh crore while the GDP was valued at Rs. 48 lakh crore.
The stock market witnessed a massive drop in the fifteen months after the ratio hit a record high
After the market cap to GDP ratio reached a record high of 149.4 in December 2007, the stock market fell sharply. In the 15 months after December 2007, i.e. till March 2009, this ratio fell by 66 per cent to 54.8 per cent. During this period, the market cap of the 30 companies listed on the Sensex increased by only 27.2 per cent.