The Hindu Business Line : Equity market

Market capitalisation of stocks listed in the BSE was close to Rs 34 lakh crore at the end of Friday. With DLF set to get listed, the market cap of stocks is set to rise to nearly Rs 35.1 lakh crore within touching distance of the GDP of Rs 35.3 lakh crore. If we consider the FCCB issues made by a number of companies, the fully diluted market cap would already be in excess of the GDP at market prices. This is not merely a statistical landmark. It points to the increase in depth of the Indian equity markets.

A vibrant and deep capital market may also have implications for the fund raising plans of Indian companies.

Would equities, not debt, emerge as the predominant source of finance?

Contrarily, rise in market cap to GDP ratio beyond historical levels is also seen as a signal to sell stocks. Next few months should be interesting in this context.

Suresh Krishnamurthy

Chennai

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