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The stock markets of the country are displaying a new vigour. On Monday Nifty recorded a historic high even before the better-than-expected fourth-quarter GDP numbers were announced. On May 24, the cumulative market capitalisation of the companies listed on the Bombay Stock Exchange surpassed $3 trillion, which is 1.12 times the country’s GDP.

The journey of the market index appears impressive by any standard. Since 1990 the Sensex has risen from 1,000 to 50,000 at a CAGR of 14.9%. This has perhaps prompted the recent hope in some quarters that the BSE index will touch 200,000 in the next 10 years which requires a consistent CAGR of 15% during the entire period.

Buoyed by the rate of growth the BSE boss Ashishkumar Chauhan has even stated that achieving a $5 trillion dollars cumulative market capitalisaiton in five years is quite within achievable limits. His logic: what is happening in the stock markets is largely a reflection of what is happening in the Indian corporate sector.

Perhaps the most remarkable feature of the growth story in the markets has been the overwhelming participation of the retail investors who had even pushed the institutional investors, domestic and foreign, away from the centre stage. Accounts of active investors went up by 1.04 crore in Covid-scarred 2020. What is even more important is that a large number of millennials are investing in equities and many of them are doing so even before they are out of their student days. This will spell the beginning of a new investment culture with a far bigger risk appetite and risk-taking ability than the earlier generations. If retail participation was not solely driven by Covid-triggered inactivity wealth creation will be democratised further. The stock markets will then begin to shape the great Indian dream.