2022 roundup: India’s investment market trends

investment market

The majority of trade in the Indian stock market occurs on the country’s two stock exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been around since 1875.

The NSE, on the other hand, was established in 1992 and began trading in 1994. Both exchanges, however, use identical trading systems, trading hours, and settlement methods. The BSE had 5,565 listed enterprises as of November 2021, whereas the rival NSE had 1,920 as of March 31, 2021.

Almost all of India’s major corporations are listed on both markets. The BSE is the elder stock exchange, while the NSE is the largest in terms of volume. Both exchanges compete for order flow, which leads to lower costs, increased market efficiency, and innovation. The existence of arbitrageurs keeps the prices on the two stock markets fairly close together.

According to IBEF, India’s economy showed strong indications of recovery in FY22. At current prices, India’s GDP is expected to be Rs. 36.85 lakh crore (US$ 447.44 billion) in the first quarter of 2022-23, up from Rs. 32.46 lakh crore (US$ 394.13 billion) in 2021-22, representing a 13.5 per cent growth rate, while nominal GDP is expected to be Rs. 64.95 lakh crore (US$ 788.64 billion), representing a 26.7 per cent growth YoY. These estimates place India as the world’s fastest-growing major economy, and this economic expansion has influenced the Indian investment industry. Retail investors, mutual funds, and private equity and venture capital firms have all increased their domestic investments in India.

In terms of FDI, India got its highest-ever annual FDI inflow of US$ 83.57 billion in FY22, representing an 85.09 per cent increase from US$ 45.15 billion inflows in FY15. FDI equity inflows into the manufacturing sector were US$ 21.34 billion in FY22, up 76 per cent from US$ 12.09 billion in FY21.

Singapore (27 per cent) had the greatest FDI equity inflows into India in FY22, followed by the United States (18 per cent) and Mauritius (16 per cent).

Puneet Maheshwari, Director- Upstox, said that “The year 2022 has been a significant one for India’s investment market, wherein we witnessed some remarkable milestones. A landmark occurrence was the total number of Demat accounts in India crossing the 10-crore mark this year, clearly depicting the increasing awareness and interest in equity participation. A major driver of this trend can be attributed to the new-age investing platforms with strong technology infrastructure have given investing access to users across the nation. Mirroring this surge, at Upstox, we too crossed 1 crore customer base in May 2022.

This year India has seen modest growth. From July to September, there were six major economies – Malaysia, Greece, the Philippines, Israel, Colombia, and Argentina – with growth higher than the 6.3 per cent which India achieved in the April to September quarter of this fiscal. Growth by the year’s end is unlikely to be vastly different (source). A few of the macroeconomic factors for this include inflation, fear of recession, volatile markets, etc.

However, we witnessed some positivity after nearly two years of social, financial, and economic uncertainty and we expect that more financial power in the hands of citizens, will lead to surging equity participation and a stronger economy in the coming years. According to reports, by 2027, India’s economy will rank third in the world, and by the end of the decade, its stock market will rank third. Economic growth will be more robust, equity participation will rise, and citizens will hold more financial sway. (Source: Report) This is a very positive indication of where the future of India is headed.

At Upstox, it is our endeavour to contribute to Bharat’s growth story, and we plan to do so by providing our users with the best services, backed by superior, robust, and unmatched technological infrastructure.”

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