Indian Capital Market Expected to Achieve 17-45% CAGR Revenue Growth from FY24 to FY27
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Mumbai, Dec 10 (NationPress) The Indian capital market is anticipated to witness a compound annual growth rate (CAGR) ranging from 17-45 percent in sustained revenue growth during the period from FY24 to FY27, as reported by Motilal Oswal Financial Services Ltd (MOFSL) on Tuesday.
The entire capital market ecosystem, which includes asset management companies (AMCs), brokers, exchanges, intermediaries, and wealth managers, is expected to experience consistent revenue growth throughout this timeframe.
The fixed cost nature of these segments will facilitate operating leverage, leading to enhanced profit growth, as highlighted in the report. Furthermore, strong cash flow, healthy dividend distributions, and superior return on equities (RoEs) reinforce MOFSL's optimistic outlook for the entire capital market sector.
“The impressive expansion of the Indian capital market over the last five years signifies the onset of a sustained, multi-year structural uptrend, driven by favorable demographic trends as more individuals join the workforce, contributing to the growth of the middle class,” the report underlined.
Digital advancements such as E-KYC, UPI, and Account Aggregation have significantly contributed to this growth, while regulatory reforms have further bolstered the ecosystem, enhancing transparency and security for investors.
As a result, AMCs, exchanges, brokers, wealth managers, and other intermediaries are strategically positioned to take advantage of these emerging trends, according to the report.
Over the last five years, the number of demat accounts has increased by 4.4 times (179 million), active accounts on the NSE have risen by 4.9 times (49 million), unique mutual fund investors have grown by 2.4 times (50 million), and monthly SIPs have surged by 3.2 times (Rs 253 billion) from FY20 to October 2024.
The report forecasts that in the next decade, the demographic dividend will become even more pronounced, with over 100 million individuals entering the workforce and about 100 million households moving into the middle-income bracket.
With strong economic growth, the number of High Net-worth Individuals (HNWIs) and Ultra High Net-worth Individuals (UHNWIs) is on the rise in India (growing at 12 percent CAGR), and their wealth is increasing at an even faster rate, supported by thriving equity markets, the report concluded.
