India's market capitalisation-to-GDP ratio slips to 95 in FY23, shows data

Reading rides on coat-tails of Rs 31-trn decline in India's m-cap to Rs 258 trn

India’s market capitalisation (m-cap)-to-gross domestic product (GDP) ratio for the current financial year (2022-23, or FY23) could end below 100. If so, this will be the first time since 2019-20 that the reading has been in double digits.

At present, India’s m-cap-to-GDP ratio is around 95 per cent of its estimated GDP for FY23, according to Motilal Oswal.

A drop below 100 indicates that the markets have cooled off but are yet to fall to attractive levels. In the past 12 years, the average m-cap-to-GDP for the domestic markets has been 80 per cent.

The reading rides on the coat-tails of a Rs 31-trillion decline in India’s m-cap in the previous two months to Rs 258 trillion, largely on account of a slide in Adani Group stocks.