New Delhi, Jan 31 India's capital markets have demonstrated strong performance, driving capital formation in the real economy, increasing the financialisation of domestic savings, and supporting wealth creation, the Economic Survey 2024-25 stated.
Investor participation in capital markets has been on the rise, with number of investors growing from 4.9 crore in FY20 to 13.2 crore as of December 31, 2024. This growth, combined with active listing activity and recent measures by the regulator, the Securities and Exchange Board of India (SEBI), to temper excesses, is expected to foster sustainable market expansion, according to the survey.
Strong macroeconomic fundamentals, healthy corporate earnings, supportive institutional investment, robust inflows from SIPs, and increased formalisation, digitisation, and accessibility have all fuelled the market's continued growth.
The survey highlights that the primary markets continued to witness heightened listing activities and investor enthusiasm in FY25, notwithstanding the market volatility and geopolitical uncertainties.
The total resource mobilisation from primary markets (equity and debt) stands at Rs 11.1 lakh crore from April to December 2024, which is 5 per cent more than the amount mobilised during the entire FY24. India's share in global IPO listings surged to 30 per cent in 2024, up from 17 per cent in 2023, making it the leading contributor of primary resource mobilisation globally.
BSE market capitalisation to GDP ratio stood at 136 per cent at the end of December 2024, rising significantly over the last 10 years. The positive performance of the Indian stock was driven by strong profitability growth, rapid traction of digital financial infrastructure, expanding investor base and substantial reforms in products and processes.
The Survey also highlights that India's insurance sector is performing well and is projected to become the fastest-growing market among G20 nations over the next five years (2024-2028). It has continued its upward trajectory, with total insurance premiums growing by 7.7 per cent in FY-24, reaching Rs 11.2 lakh crore.
With an overall insurance penetration rate of 3.7 per cent, below the global average of 7 per cent, there is a notable gap in coverage that presents opportunities for insurers to expand their reach.
The Survey further points out India's pension sector has grown significantly since the introduction of the National Pension System (NPS) and Atal Pension Yojana (APY). As of September 2024, the total number of subscribers reached 783.4 lakh, showing a YoY growth of 16 per cent from 675.2 lakh in September 2023.
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