India could become the world’s 5th largest stock market

India can overtake UK to become world’s 5th largest stock market

Investors are pouring money into the Indian stock market and this market may rise to the 5th position in the world by 2024 when the size reaches 5 trillion USD.

Investors monitor developments on the Bombay Stock Exchange (BSE) in Mumbai, India. Photo: AFP

According to a summary from global investment bank Goldman Sachs, Indian startups have raised $10 billion through initial public offerings (IPOs) since the beginning of the year, more than the number of startups. money they have raised in the last 3 years.

Goldman Sachs analysts believe that the strong cash flow into India through listing deals will be maintained in the next two years. It is expected that about 150 private companies will be listed in the Indian market within the next 36 months.

“We estimate nearly $400 billion will be injected into the Indian market through IPO over the next 2-3 years,” Goldman Sachs analysts said. This inflow of capital could pull the market capitalization of India up to $5 trillion by 2024, from $3.5 trillion today, helping the South Asian country surpass the United Kingdom and the Middle East to become a major market. 5th largest stock exchange in the world.

Many big tech startups in India have announced plans to list and promise to create a new era for the entire startup ecosystem in the country. Food delivery startup Zomato topped the list of listing deals with high prospects for success in the near future, along with many other names such as payment platform Paytm, ride-hailing company Ola and Trading Company. Flipkart electronics.

The digital economy is creating a strong attraction for investment flows into India. The South Asian country has 800 million internet users and more than 500 million smartphone users, second only to China. In addition to the advantage of low-cost mobile data services, the Covid-19 pandemic has also caused many Indian industries / sectors to accelerate digitization, from delivery, shopping, education, to online payment.

Inherently, Indian businesses can manage digital transformation quickly because this South Asian country has developed significant in terms of technology infrastructure before the pandemic appeared. Hence, startups can scale and grow fast.

The number of “unicorn startups” (valued above 1 billion USD) in India has recently skyrocketed. Follow explanation of Goldman Sachs bank, the rapid development of the Indian internet ecosystem, plus the advantage of abundant private capital and a favorable regulatory environment are the factors that create momentum for startups to emerge.

Goldman Sachs estimateAt least 67 private startups in India have grown into unicorns, of which 27 claim they will reach a valuation of $1 billion this year. Notably, most of these unicorn startups operate in the field of digital economy.

India’s capital markets are expected to transform as unicorns go public, so Indian stock indexes will also rally in the next few years.

In the next 5 years, India’s share of the global stock market is forecasted by Goldman Sachs to grow to 3.7%, from 2.8% today. India’s share of global GDP will also increase by about 40 basis points over the next five years.

Currently, major Indian stock indexes are being led by players from traditional sectors such as energy and information technology. But these indexes, including Nifty, are expected to receive large capital flows when companies from new economic sectors land on listing, in which digital technology startups will be listed. lead trend. New economic sectors here implies high growth industries thanks to modern technology and is expected to be the growth engine of the Indian economy.