A bumper year for equities, and the promise of more

Indian equity markets extended their winning streak for the 8th consecutive calendar year, with the Nifty gaining 20% in 2023. Mid-cap and smallcap investors saw an even faster rise in wealth.

Many IPOs delivered outstanding returns as investors rushed to new offerings amid a dearth of reasonably valued stocks in secondary market. Retail investors continued to invest big, steadily eroding foreign investors’ hold on the Indian market.

On average, they invested Rs 15,100 crore a month via MF SIPs in 2023, while 26.8 million new demat accounts till November showed large direct retail participation. Foreign investors panicked halfway through the year but, in the end, flocked back to pump in highest-ever Rs 1.75 lakh crore, bettering 2020’s Rs 1.73 lakh crore.

Indian equities were among the best performing as the economy remained firm while the rest of the world stuttered. PSUs delivered huge returns. Large-caps caught up strongly towards the end of the year. Overall, Indian markets added nearly $1 trillion in market cap in 2023. Analysts suggest that replicating the performance of 2023 in the upcoming year hinges on a significant acceleration in corporate profitability.