Central PSUs record 47 per cent jump in net profit for 2023-24, market cap doubles
The market capitalisation of CPSEs more than doubled in Fiscal Year 2024-25 as compared to Fiscal Year 2023-24, the report said.
In the last 10 years, funds mobilized by Indian companies from capital markets has increased more than 10-fold, from Rs 12,068 crore in financial year 2014 (FY14) to Rs 1.21 trillion crore in FY25 (till October), a recent report by the SBI Economic Research Department said.
Further, the report also said that the savings of households in “shares and debentures” has increased to 1% of GDP in FY24, from 0.2% in FY14 and the share in household financial savings has increased from 1% to 5%, which indicates that the households are now increasingly contributing to the capital needs of the country.
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The share of net financial savings in total household savings has increased from 36% in FY14 to 52% in FY21, however during FY22 and FY23, the share has decelerated. In FY24 trends reveal that the share of physical savings has again started to decline.
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It said that a 1% rise in market capitalisation leads to a 0.6% rise in gross domestic product (GDP) growth rate.
It said that a higher market capitalisation signals a robust economy and reflects increased investor confidence, which in turn drives overall economic growth.
“The impulse response shows that 1 standard deviation shock in market capitalisation has a positive impact on the real economy with the impact drying out after three time periods,” the report said.
Granger causality analysis reveals that growth in market capitalisation Granger-causes growth in GDP, while the reverse — causality from GDP to market capitalisation — does not hold, it said.
Since 2021, on an average around 30 million new demat accounts were added every year indicating increasing prevalence of using the capital market as a channel of financialization of savings. This year, the number may cross the 40 million mark, the report said.
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