What are some of the interesting facts about the Indian stock market?
Fascinating Facts About the Indian Stock Market
Historical Milestone: The BSE SENSEX, India's first equity index, made its debut on January 2, 1986, with a base year of 1978-79, set at 100. In just 4.5 years, on July 25, 1990, the S&P BSE SENSEX triumphantly closed above the 1000 mark.
Impressive Market Capitalization: As of October 2020, the market capitalization of the Bombay Stock Exchange (BSE) reached a staggering ₹160,680 billion, equivalent to approximately US$2.2 trillion.
Notable Market Declines: During moments of economic turbulence, the Indian stock market has witnessed some significant single-day falls. Unsurprisingly, the COVID-19 pandemic holds the record for causing these sharp downturns three times.
Bull Markets in India: Bull markets, characterized by prolonged periods of rising stock prices, have left their mark on India's stock market history. These phases of optimism and growth have led to considerable wealth creation for investors.
Demat Accounts Growth: The increasing number of Demat accounts in India reflects the growing participation of individuals in the stock market. India's population was around 1.25 billion in 2011, with only 19 million Demat accounts, accounting for 1.5% of the population. By 2020, India's population had risen to 1.38 billion, and the number of Demat accounts had surged to 40.8 million, approximately 3% of the population. While this is a positive sign of growth, it's worth noting that there's still ample room for further expansion.
Global Perspective: In 2020, 55% of adults in the United States were reported to have invested in the stock market, demonstrating that there is room for a higher percentage of Indians to participate in the equity market.
The Multibagger Phenomenon: India's stock market has witnessed spectacular multibagger returns on investments. Several stocks that were considered penny stocks or had modest prices years ago have experienced remarkable appreciation:
In June 1998, Eicher Motors shares were trading at approximately ₹9. As of now, the stock's price has skyrocketed to ₹2452.
In September 2003, Kotak Bank shares were valued at ₹1.8, and today, they trade at ₹1992.
Back in September 2000, Titan shares were available at just ₹2.6. Currently, the price stands at ₹1544. This substantial growth played a pivotal role in the wealth accumulation of prominent investors.
In November 2002, Bajaj Finance shares were trading at ₹4.2. A ₹10,000 investment at that time would have yielded 2380 shares. Today, those 2380 shares would be valued at ₹1,23,76,190, even before considering the bonus share issued at a 1:1 ratio in 2016.
Retail Participation: India has witnessed a significant increase in retail participation in the stock market, with more individual investors actively engaging in equity trading.
Diverse Sectors: The Indian stock market offers investors access to a wide range of sectors, from technology and finance to manufacturing and consumer goods. This diversity reflects the vibrancy and complexity of the country's economy.
These captivating facts showcase the dynamic nature and the immense potential of the Indian stock market, which continues to attract investors and shape the financial landscape of the nation.
Disclaimer: The information provided above about the Indian stock market and its historical facts is intended for general informational purposes only. It should not be considered as financial advice or a recommendation for investment decisions. Investing in the stock market involves risk, and past performance is not indicative of future results. Individuals considering investment in the stock market should consult with a qualified financial advisor and conduct thorough research to make informed decisions. Any investment in stocks or financial instruments should be made with a clear understanding of the associated risks, and individuals are advised to diversify their portfolios to mitigate risk. The stock market is subject to fluctuations, and investors should be prepared for potential losses. The provided facts are based on historical information, and market conditions may change. No responsibility or liability is accepted for any direct or indirect consequences resulting from reliance on the information presented.