Investor wealth surges by ₹90 tn in FY21 amid covid
India’s benchmark indices gained 69-71% in FY21, hitting record highs multiple times
Equity investors grew richer by ₹89.95 trillion, as the markets rose 79.26% in 202 0-21, despite the covid-led disruptions and uncertainties amid the lockdown. This is the highest ever accumulation of investor wealth for the Indian markets in a financial year.
Measured in terms of total market capitalization of all listed stocks on the BSE, overall investor wealth grew to ₹203 trillion, up from ₹113 trillion in the beginning of April 2020, BSE data showed. In FY20, investor wealth had depleted by 24.89% as the markets plunged because of a sharp sell-off in March 2020. In 2018-19, investors had gained ₹8.84 trillion as the market capitalization of BSE-listed companies rose to ₹151.08 trillion.
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India’s benchmark indices, the Sensex and Nifty, gained 69-71% in FY21, hitting record highs multiple times during the fiscal year. Smaller stocks gave strong returns to investors, with Nifty Midcap 100 and Nifty Smallcap 100 rising 100.04% and 128.31%, respectively.
Market growth was primarily driven by foreign investors. “India has outperformed emerging markets for over three months and is trading above its historical price to equity premium to emerging markets. Relative to bonds, equities are in the 75th percentile historical range. After months of buying, foreign institutional investor ownership has touched peak levels. Of the risks we would keep an eye on, commodity costs are right on top," noted analysts at UBS Securities in a client note on 17 March.
Among conglomerates, market capitalization of the Adani group rose the most, multiplying more than four times from ₹1.22 trillion at the start of the fiscal to ₹5.44 trillion now. The market cap of Adani Green, which is not part of the benchmark Nifty, has risen close to seven times from a shade above ₹24,000 crore at the beginning of the year to ₹1.86 trillion. Adani Ports’ market cap gained a little less than three times from ₹51,000 crore in April 2020 to ₹1.39 trillion.
The market capitalization of 28 listed firms of the Tata group was at ₹17.24 trillion, making it the most valued group. The Tata group has gained ₹7.94 trillion, or 85.31% in overall market cap so far in FY21. Among the Tata group, the market cap of Tata Communications, which is not part of Nifty, has risen more than five fold from a little over ₹664 crore to ₹33,500 crore, while the market cap of index stocks, including TCS, Tata Motors,Titan and Tata Steel has risen 65.64%, 365.09%, 57.23%, and 169.69%, respectively, so far in FY21.
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Barring Coal India (down 2.68%), all Nifty stocks are poised to give positive returns in FY21. The gains were led by Tata Motors (334.83%). Hindalco Industries and JSW Steel gained 250.16% and 201.23%, respectively, following a correction in base metals prices in the first half of the fiscal year. Mahindra and Mahindra gained 198.40% and Grasim Industries rose by 196.42%. Index heavyweight Reliance has gained 88.71%. Stocks of fast-moving consumer goods firms, Nestle India and Hindustan Unilever, gave returns of less than 1% at 0.92% and 0.59%, respectively.
All sectoral indices on the NSE gave positive returns in 2020-21. Three sectoral indices gave more than 100% returns.
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