India's total market cap touches all-time high of $5.5 trn for first time

India's market cap crossed $5.5 trillion for the first time on Tuesday, just over two months after it first crossed $5 trillion. The milestone comes amid broader market outperformance even as the benchmark indices ended little changed for a second day in a row. After Tuesday’s trade, the combined market cap of all BSE-listed companies stood at Rs 461 trillion ($5.5 trillion).

India’s market capitalisation had closed above $5 trillion on May 24, 2024, as per Bloomberg data.

The combined market capitalisation reached $1 trillion on May 28, 2007, and it took another 10 years to reach $2 trillion. Since then, the time taken for new milestones has been getting shorter. It took roughly four years to reach $3 trillion, less than two years to reach $4 trillion, and just six months to hit $5 trillion.

India's macroeconomic stability and robust growth during a time of global financial distress, abundant liquidity due to the influx of domestic investors post-pandemic, and the return of foreign portfolio investors (FPI) since June have helped Indian equities add another half a trillion dollars in about two months. Market experts are cautious about the outlook as valuations are elevated, especially in the broader mid and small-cap space. "One is not concerned about the index. But a correction in mid and small caps is only a matter of time," said Chokkalingam G, founder of Equinomics. Over the past year, small- and mid-caps have seen their share in overall market cap rise.

Earlier this year, India surpassed Hong Kong as the world’s fourth-largest stock market. Since then it has widened its lead over the city-state.