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Over the last ten years, fund mobilisation by Indian companies has grown tenfold.
A report by the State Bank of India (SBI) says that fund mobilisation through capital markets has increased from Rs 12,068 crore in 2014 to Rs 1.21 lakh crore in FY25 (up to October). This significant growth reflects the strengthening of India's economy and the rising confidence of investors. It said, "In the last 10-years, funds mobilized by Indian companies from capital markets has increased more than 10-fold." The report also highlighted that a 1 per cent rise in the stock market's, market capitalization contributes to a 0.06 per cent increase in the country's GDP growth rate. A higher market capitalization is an indicator of a robust economy, which fosters investor confidence and drives overall economic progress. The report said, "A higher market capitalization signals robust economy and higher investor confidence consequently driving overall economic growth." Additionally, an impulse response analysis shows that a one-standard-deviation shock in market capitalization positively impacts the real economy, though the effect diminishes after three time periods. The report also said that household participation in the stock market has also grown considerably. Savings in 'shares and debentures' have increased from 0.2 per cent of GDP in FY14 to around 1 per cent in FY24. Furthermore, the share of these savings in overall household financial savings has risen from 1 per cent to 5 per cent during the same period. This indicates that households are increasingly contributing to the capital needs of the economy. The report also underlined the impressive growth of the National Stock Exchange (NSE) market capitalization, which has expanded over six times to Rs 441 lakh crore in FY25 (so far) compared to FY14. As a result, the average trade size in the equity cash segment has grown from Rs 19,460 in FY14 to Rs 30,742 in FY25 (to date). The report highlights the transformative role of capital markets in financing India's growth story, with rising investor participation and household contributions bolstering the country's economic trajectory. (ANI)
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