Keanu Reeves is back with the fourth instalment of Matrix. The movie is titled Matrix: Resurrection. However, if one wants to talk about resurrection in real life, look no further than the Indian stock market. Coming on the back of a devastating second wave of the pandemic, not many would have given the Indian market a chance to resurrect itself. However, wading through the testing waters, the Indian market, and in turn, the economy is soaring to new heights.
Aided by a cooperative Modi administration, coupled with a slew of reforms in the sector and an ambitions vaccination drive – the stock market is glowing. According to an ET report, the premier stock indices of the country have added a whopping Rs 72 lakh crore during 2021 to investors’ wealth, measured as the cumulative value of all listed shares in the country, taking it to nearly Rs 260 lakh crore.
Since the historic lows of March last year, India’s Sensex has risen about 119%, the highest among countries with stock markets worth $1 trillion or more – beating the likes of the S&P 500 and China’s CSI 300.
In early 2020, India was adding 400,000 investor accounts every month, according to its market regulator. In 2021, that number has grown to about 2.6 million, about half the population of New Zealand.
One of the major reasons for the ‘green’ in the stock exchange is the spectacular rise of unicorns which are going public at a breakneck speed. 2021 has been a sensational year for the Indian startup ecosystem which well and truly has surpassed all projections — both in terms of the number of unicorns and the funding raised.
A UK-based Investment data platform Preqin in its report has stated that India’s burgeoning startup system received a record investment of nearly $ 36 billion in privately held companies in the year 2021. The seed-funding in nearly 396 deals contributed to $705.86 million while about 166 investments at series A amounted to about $1.67 billion.
43 unicorns in 2021
Till December, 43 unicorns have emerged in the country with Pristyn Care being the latest. Overall, India now houses 79 unicorn startups. Not only this, but the unicorns have also been able to take the next step by going public as well.
A slew of IPOs released by Dalal Street this year found interest in the ‘no-nothing-investors’. Paytm became the country’s largest IPO ever with an issue size of 18,300 crores, with other companies like Zomato, Policy Bazaar, PharmEasy and Nykaa also coming up with their respective IPOs.
Although Paytm’s listing wasn’t as royal as many would have predicted, it still showed that the no-nothing investors were betting on the future of such companies to yield the profits.
Digital payments sector
In the digital payments sector as well, India has continued to reach new frontiers. As reported by TFI, with 418 crore transactions worth Rs 7.68 Lakh Cr (approx $102.4 Bn) in November, UPI has continued to breach the $100 Bn value mark.
In October, PhonePe led the UPI numbers with 193 crore transactions worth Rs 3.65 Lakh crore. Google Pay maintained its second lead with 145 crore transactions worth Rs 2.87 Lakh Cr. Next in line were Paytm (632 million transactions worth Rs 80,508 crore); Amazon Pay (68.82 million transactions worth Rs 6,286 crore) and WhatsApp Pay (2.6 million transactions worth Rs 104 crore).
Fastest-growing economy — India
The wealth generated by the market comes at the heel of encouraging GDP data. For the third consecutive quarter, the Indian economy has posted the highest growth rate among the major economies of the world. In the second quarter of the ongoing fiscal year (third quarter of calendar year), the Indian economy grew at 8.4 per cent as compared to the same quarter of the last fiscal year.
Apart from headline GDP figures, other high-frequency economic indicators like GST, imports, exports, manufacturing PMI, foreign direct investment showed very good results. India remains the second largest FDI recipient in the world, fast catching up with China. The GST collection in the last month was the second-highest (at 1.31 lakh crore rupees) since the implementation of the nationwide indirect tax in 2017.
Moody’s says GDP to grow, GST collection to touch new heights
However, it’s not only at the GST front that India under the Modi government is hurtling through new barriers – the banking sector which forms the bedrock of the economy has been resuscitated as well.
As reported by TFI, global credit rating agency Moody revised the outlook for the Indian banking sector to stable from negative.
The credit agency added, “We have revised the outlook for the Indian banking system to stable from negative. The deterioration of asset quality since the onset of the coronavirus pandemic has been moderate, and an improving operating environment will support asset quality. Declining credit costs as a result of improving asset quality will lead to improvements in profitability,”
Reportedly, the agency believes that aided by a stable banking sector, India’s economy will continue to recover miraculously in the next 12-18 months, with GDP growing 9.3 per cent in the fiscal year ending March 2022 and 7.9 per cent in the following year. Meaning, the GST collection, which just touched its second-highest revenues will hit new highs.
The Nehruvian socialism of the yore was the real reason why India’s economic growth rate continued to crawl at a snail’s pace when other nations such as China overtook us and proudly wore the crown of a ‘developed nation’. Since then, the communal and the diminishing term had been stuck like an albatross around the neck of a proud nation.
However, against the odds, the government, RBI and the investors have persevered and are now reaping the rewards. This is the exciting time to be in the Indian market to bet heavy and risky – for the returns are far too big to ignore.