Investors' wealth rises massively by over Rs90.82 lakh crore in FY21

New Delhi:  Investors’ wealth grew massively by Rs 90,82,057.95 crore in 2020-21 driven by an extraordinary rally in the equity market, where the benchmark Sensex jumped 68%.

In an unprecedented rally, the 30-share BSE Sensex jumped 20,040.66 points or 68% this fiscal year, braving many uncertainties due to COVID-19-led disruptions. Market analysts termed 2020-21 a roller coaster ride for not only Indian markets but also for equity indices globally due to the pandemic.

But with markets making a comeback towards the latter part of the fiscal year, investors were rewarded with high returns. Thanks to the improved investor sentiment, the market capitalisation of BSE-listed companies zoomed Rs 90,82,057.95 crore to reach Rs 2,04,30,814.54 crore in 2020-21.

On March 3 this year, the market capitalisation of BSE-listed companies had reached its lifetime high of Rs 2,10,22,227.15 crore.

“The bull-run got further strength with the progressive unlocking and sharp rebound in the economy. The Discovery of vaccines and optimism it generated gave further strength to the bulls. Globally, markets witnessed a huge rally in November. Emerging markets continued to be flooded with FPI money,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

The BSE index closed 627.43 points or 1.25% lower at 49,509.15 on the last day of trade of fiscal year 2020-21 on March 31.

From witnessing massive losses to record-breaking gains, investors witnessed a wide array of emotions in 2020-21.

The remarkable rally in the markets is significant as equities had gone into a tailspin in March 2020, with the Sensex sinking a massive 8,828.8 points or 23% during that month as concerns over the pandemic’s impact on the economy ravaged investor sentiments.

The BSE barometer had plummeted 9,204.42 points or 23.80% in 2019-20.

“Markets have truly seen one of the best recoveries in FY’21 led by easing restrictions, strong global cues and government support. However, in terms of returns, we had seen a similar recovery post the global financial crisis in FY’10 (~74%) and FY’04 (~81%). But considering the markets witnessed a sharp fall in a very short duration, this recovery has been remarkable,” said Ajit Mishra, VP Research, Religare Broking.

The benchmark Sensex hit record highs multiple times during this financial year. The frontline index had closed above the 50,000-mark for the first time ever on February 3 this year, mainly driven by euphoria over the Union Budget. It closed above the 51,000-mark on February 8.

The index rallied over the 52,000-mark for the first time on February 15. A number of mainboard initial public offerings during the fiscal year, with many of them receiving massive subscriptions, including MTAR Technologies, Burger King India and Mrs Bectors Food Specialities, also added to improved market sentiments.

The year 2020-21 saw most of the IPOs opening with a premium over the issue price suggesting strong investors appetite.

Reliance Industries is the country’s most valued firm with a market capitalisation of Rs 12,69,917.01 crore, followed by Tata Consultancy Services (Rs 11,75,410.56 crore), HDFC Bank (Rs 8,23,360.73 crore), Infosys (Rs 5,82,751.89 crore) and Hindustan Unilever (Rs 5,71,132.95 crore) in the top five order.

“With the financial year ending, investors would now focus on upcoming quarterly results which would kick-start from mid-April. Domestically, concerns over the fast-spreading 2nd wave of COVID-19 in India continues to remain and the fear of possible lockdowns prevail.

“Overall markets are likely to remain in a consolidative mode for some time awaiting fresh positive triggers,” Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services said.