Market hits Rs 50-lakh-crore mark on IPO revival hopes

The ongoing surge in the stock market has pushed the shareholders’ wealth past the Rs 50,00,000 crore mark — in the process bringing in over 100,000 new investors on-board in just one month.

A total of about 120,000 new stock market investors opened their demat accounts, which is necessary to trade in equities, during the month of May, according to data available with the two depositories, National Securities Depository (NSDL) and Central Depository Services (CDSL). This has increased the total number of demat accounts in the country to over 15 million.

Market experts believe the inflow of a large number of new investors into the market could be attributed to the sharp surge in recent months, as well as expectations for revival of the IPO market with some fundamentally-sound public issues by government-run companies.

The total investor wealth, measured in terms of cumulative market capitalisation of all the listed companies, has soared to about Rs 51,00,000 crore. This represents a gain of about Rs 23,00,000 crore from the level seen in later October last year, although it is still about Rs 20,00,000 crore below the peak seen in January 2008.

With the benchmark Sensex hitting its record high of 21,206.77 points on January 10, 2008, the total investor wealth had risen to a high of about Rs 72,00,000 crore at that time. However, a sharp meltdown thereafter pulled the Sensex to below the 8,000-mark in late October 2008.

Since then, the Sensex has nearly doubled and has regained the 15,000-point mark. Out of the total gain of about 7,500 points in the benchmark Sensex since its 52-week low of 7,697.39 points on October 27, 2008, nearly half the gain has materialised in the past one month alone.

Coinciding with the rally in the stock market, which was partly fuelled by the new government promising speedier economic reform process and also disinvestment in some PSUs through IPOs, the total number of demat accounts swelled, as mentioned, by over one lakh over the last month.