NSE Market Cap Tops $4 Trillion Amid Unprecedented Bull Run

The market capitalisation of the National Stock Exchange has topped $4 trillion (about Rs 334.72 lakh crore), amid a frothy equity market.

The peak was scaled on Friday, Dec. 1, 2023—the same day, the Nifty 50 and Nifty 500 hit all-time highs of 20,291.55 points and 18,141.65 points, respectively, indicating that the rally isn't restricted to large cap stocks.

As on date, the top-three companies by market capitalisation are Reliance Industries Ltd., Tata Consultancy Services Ltd. and HDFC Bank Ltd.

“(This) is an important milestone in the country's journey towards becoming a $5 trillion economy. The positive sentiment in the economy has provided a thrust to capital markets,” Sriram Krishnan, chief business development officer at National Stock Exchange of India Ltd., said in a media statement on Sunday. “(NSE) will continue to provide a robust platform for investors to invest in a variety of financial products, thereby supporting the important aspect of capital formation in the country.”

While the $4-trillion valuation peak is laudable, India is among the top-five nations in terms of market cap, data suggests that only 0.35% of all private firms in India are listed—indicating a largely untapped potential.

NSE's market cap is 1.18 times that of India's gross domestic product of $3.6 trillion—miniscule when compared to the US and Japan. In 2023 so far, NSE's share turnover velocity—the ratio between order book of shares and their market cap—stood at 47%, which is puny when compared to the high velocity markets of the US, Japan, South Korea, China and Brazil.

That, however, is the perfect recipe for a takeoff in primary markets.

In 2023, NSE's daily average turnover grew 27% year-on-year in the equity segment and 5% in the derivatives segment. In the last 10 years, the equity segment's daily average turnover has increased by more than six times while that of derivatives is up more than five times.

Also, in the first half of Fiscal 2024, more than Rs 5 lakh crore has been mobilised through primary markets across equity and corporate bonds.