Market Activity
India's economy showed great signs of recovery in FY22 after the COVID-19 pandemic. India’s nominal gross domestic product (GDP) at current prices is estimated to be at Rs. 301.75 trillion (US$ 3.62 trillion) in 2023-24. Additionally, the Nominal GDP at current prices in Q2 of 2023-24 was Rs. 71.66 trillion (US$ 861.2 billion), as against Rs. 65.67 trillion (US$ 789.2 billion) in 2022-23, estimating a growth of 9.1%. Real GDP at constant prices (2011-12) in H1 of 2023-24 is estimated at Rs. 82.11 trillion (US$ 989.6 billion), showing a growth of 7.7% as compared to the H1 of 2022-23 estimated at Rs. 76.22 trillion (US$ 917 billion). These figures make India the fastest-growing major economy in the world, and this economic growth has translated to the domestic investment market in India. Retail investors, mutual funds, and PE/VC firms have all stepped up their domestic investments in the Indian market.
Retail and High Net-worth Individual (HNI) investors and domestic institutional investors (DIIs) combined share, which includes domestic mutual funds, insurance companies, banks, financial institutions, pension funds, etc., reached an all-time high of 25.50% as of June 30th, 2023. In the Q1 (April-June) of 2023, Domestic institutional investors (DIIs) invested a record sum of US$ 405.24 million in Indian equities.
The share of retail investors in equity holding listed on the National Stock Exchange (NSE) reached an all-time high of 27% year-on-year (YoY) in (April-August) 2023. According to BSE, the number of registered investors on BSE has jumped nearly 28.83% YoY and 3.01% month-on-month (MoM) as on February 01st, 2024. In 2024, states registering a YoY rise of over 40% in the number of BSE-registered investors are Arunachal Pradesh, Bihar, Chhattisgarh, Himachal Pradesh, Mizoram, Nagaland, Tripura, and Uttar Pradesh.
Around 166 SME companies went public in 2023, raising a total of Rs. 4,472 crore (US$ 537 million) through IPOs.
The share of domestic Mutual Funds (MFs) in companies listed on the NSE increased and reached an all-time high of 8.64% on June 30th, 2023, up from 7.24% on June 30th, 2022.
India's Private Equity (PE)/Venture Capital (VC) investment environment is also scaling new heights, with increases in deal size, deal activity, and fundraising, as well as improvements in term sheets and benchmarking practices. Private Equity-Venture Capital (PE-VC) funds invested US$ 49.8 billion (across 853 deals) in India-based companies in FY 2023 as compared to US$ 56.1 billion (across 1273 deals) of Private Equity (PE) – Venture Capitalist (VC) investments in 2022.