2021 has been a blockbuster year for Indian markets, both primary and secondary. A total of 63 companies collectively raised ₹1.2 lakh crore (INR) through initial public offerings, which is the highest amount ever raised in a single calendar year. Thanks to the red hot primary market and favorable government policies which includes :
- PLI scheme (13 production-linked schemes amounting to ₹1.97 lakh crore package to boost domestic manufacturing)
- National Asset Monetization Pipeline (spanned over course of 4 years from FY2022-FY2025 which can fetch government around ₹6 lakh crore through strategic sale on central government assets). This will help in generating funds for fresh infra investment and to complete stalled projects.
- Power reforms (₹3.03 lakh crore scheme under which state power distribution companies will receive grants each year only if they achieve the milestones agreed for the previous fiscal year)
- Strategic Bad Bank (₹30,600 crore government guarantee for the National Asset Reconstruction Company Limited (NARCL) for acquiring stressed loan assets, paving the way for operation of the bad bank)
- Air India disinvestment (Tata group unlisted firm Talace Private Limited emerged as the winning bidder for loss-making airline)
On account of strong government policies and fast recovery in country’s GDP, Indian equity market is demanding a premium to its emerging market counterparts which has risen to a decade high. As per Bloomberg, the MSCI India index, a measure widely used by global funds to gauge the performance of Indian equities denominated in dollar terms, trades at 55-60% premium to the MSCI EM index and 12% premium to MSCI World indices, which is much higher than the 5 year average premium of 45% and 8% respectively.
If coronavirus is contained effectively and GDP growth remains resilient, India is on track to become $5 trillion economy by 2025-26.
Last updated on January 31st, 2023 at 08:03 am