India’s policymakers and think tanks need to come up with steps that grow the depth and width of the country’s capital markets, Sundararaman Ramamurthy, MD&CEO, BSE has said. 

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This is particularly important given the ongoing robust growth of the country, which is now aiming to be a developed one by 2047, Ramamurthy said at the 13th International Convention, organised by the Association of National Exchange Members of India (ANMI) in the capital on Saturday.

“We do not want a situation where things are so concentrated that only few securities are active and few brokers are active. I am sure the think tanks of India and future makers of this country would take notice of this point”, Ramamurthy said.

Middle class rises

He highlighted that the Indian middle class are now going to make the stock markets very strong. 

India is becoming the world’s third largest consumer market. The disposable income by 2027 of Indians is going to increase to $3 trillion, he said. 

More than 25 per cent of the Indian population will have disposable income exceeding $10,000. This is growing at a pace of 15 per cent CAGR, Ramamurthy added. Nearly 33 per cent of Indian population are in the age group of 20-33 and the youth today have a lot of disposable income that they deploy on consumption, investment and trading. 

“Positive factors such as youth, high disposable income among them, increased consumption and investment and government investment in infrastructure denotes an Aatma Nirbhar Bharat”, he said.

“Foreign Portfolio Investors (FPI) investment used to be around 25 per cent of market cap some years before, today it has come down to 15 per cent. Retail and institutions of India have 33 per cent of market cap in their hands”, he said.

Ramamurthy also highlighted the strong inflows from middle class through systematic investment plans (SIPs).

“There is clearly channelisation of the disposable income. People are not just into consumption, but also into investments. In January 2024, as much as ₹19,000 crore has come as SIP contribution. We have a world class regulatory environment and this has helped build trust. We are in a sweet spot for various reasons”, Ramamurthy added.

Harness technology

Ramamurthy advised the broking community to harness technology in a big way, cautioning those that refuse to adapt to the new environment.

“If you do not look at it quickly you will continue to be in larger portion of population that contributes lesser for the business”, he warned.

“Late entrants have late mover technology advantage. If you are not moving, at some point of time you may become redundant”.

Ramamurthy highlighted that there are about 1,200 registered brokers in India. 

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“But if you look at their trading and volume pattern, top 10 contribute for significantly large portion of this volume and top 20 even more significantly larger portion”, he said.

Similar pattern exists for listed companies too. “We have about 5,000 listed companies. Top percentage contributes for most of volumes”, he added.