In 2003, when I turned 19, my curiosity about the share market began to blossom. Living in a C-tier town in India, however, presented challenges as there were limited sources to acquire information about the stock market, coupled with inadequate computer connectivity and internet access. Undeterred, I expressed my interest to my father, a postgraduate in Botany and a Principal at a Government School. Unfortunately, my enthusiasm was met with vehement disapproval. My father, adamant that the stock market was tantamount to gambling sanctioned by the government, resorted to physical punishment to dissuade me from pursuing this interest. Despite his stern warnings, I maintained my distance from the stock market until 2009 when I relocated to Delhi. Reflecting on my father’s cautionary stance, I remain uncertain about whether he was right or wrong. However, this episode sheds light on the prevalent skepticism within Indian families regarding the stock market, often viewed as a risky venture reminiscent of gambling rather than a legitimate avenue for financial growth.

In the year 2013-14, my father visited me in Delhi, where I was employed. Intrigued by my decision to invest a portion of my salary savings in the stock market and witnessing the substantial returns, he experienced a paradigm shift in his financial perspective. Acknowledging that he might have been mistaken in relying solely on traditional avenues such as bank savings, my father entrusted me with an investment of 20,000 rupees for the stock market. As I grappled with the question of whether my father had been wrong or circumstances had been unfavorable, I eventually arrived at a realization. The economic landscape during my father’s formative years in finance was marked by the infamous 1992 Harshad Mehta scams and the repercussions of the dot-com bubble from the USA, both of which influenced his perception of the stock market. Furthermore, limited internet connectivity and computer access, with newspapers and Doordarshan news as the primary information sources, contributed to a conservative approach rooted in family values. During that time, the prevailing sentiment in India was that wealth could only be amassed through land purchases, gold acquisitions, or savings deposited in banks with fixed deposits. It was not merely a reflection of my father’s views but rather a widespread mindset prevalent in many Indian families during that era.

In the context of financial markets, it is imperative to draw comparisons between developed countries and India. The Bombay Stock Exchange, as the first stock exchange in Asia, has a rich history, yet until 2019, only 4% of the Indian population engaged in the stock market, in stark contrast to the over 50% participation rate in the USA during the same period. The landscape began to shift after the COVID-19 pandemic-induced lockdown, with a noticeable surge in the number of participants in the Indian stock market. By the year 2023, the participation rate had risen to over 11%. To contextualize this, considering the population sizes of the USA (360 million) and India (1.4 billion), it translates to approximately 18 million participants in the USA and 15.4 million participants in India. This substantial increase in Indian market participation indicates a growing interest and confidence in the stock exchanges. Projections suggest that by 2026, India is poised to surpass the USA in terms of market participants, highlighting a promising trend in the evolution of the Indian financial landscape.

The surge in participation in the Indian stock market during the COVID-19 pandemic lockdown can be attributed to several key factors. Firstly, there was a notable increase in financial awareness among the Indian population, driven by a desire for better understanding and management of personal finances. Secondly, the emergence of discount stock brokers providing cost-effective platforms, almost free of charge, democratized access to stock trading, attracting a larger pool of investors. Thirdly, the widespread availability of high-speed internet facilitated easy access to a plethora of financial information, empowering individuals to make informed investment decisions. Additionally, mutual funds delivered impressive returns during this period, enticing more investors to explore the equity markets. The influence of popular web series, such as Scam 1992 and The Wolf of Wall Street, further fueled curiosity and interest in stock market investments. Lastly, the introduction of Prime Minister Modi’s UPI (Unified Payments Interface) initiative for cashless and immediate payments during the lockdown served as a significant catalyst, encouraging more participants to join the stock markets and embrace digital financial transactions. Collectively, these factors created a conducive environment for the substantial increase in stock market participation in India.

During the announcement of the COVID-19 lockdown in India, the stock market witnessed a substantial 40% decline, presenting an opportune moment for savvy investors. Notably, some participants seized the moment to invest in stocks, capitalizing on the favorable condition where esteemed valuation companies’ stocks listed on Indian exchanges were trading at remarkably low prices, often below their intrinsic values. For instance, Infosys stock, which was trading at a mere Rs. 950 during this period, attracted investors seeking undervalued opportunities. Despite lacking in-depth knowledge of fundamentals, these participants made strategic investments. In the ensuing months, as the US Federal Reserve slashed interest rates, foreign investors increased their stakes in Indian stock exchanges. This influx of capital not only bolstered the market but also resulted in significant returns for participants who had initially invested during the market downturn. The success stories of these early investors, coupled with their subsequent positive experiences, led to a shift in the mindset of new Indian participants. Engaging in word-of-mouth marketing through social media, they shared their success stories with friends and relatives, contributing to an increased interest and participation in the Indian stock market. This phenomenon underscored the transformative impact of informed investing during uncertain economic times.

In the current landscape, the substantial increase in the number of participants in the Indian stock market has notably fortified the influence of mutual funds and domestic institutional investors, primarily through their robust participation in Systematic Investment Plans (SIPs). This collective strength has become evident during instances of heavy selling by foreign investors, as the market has displayed resilience without experiencing significant downturns. This phenomenon has occurred consistently, approximately six to seven times, resulting in the market entering range-bound periods rather than witnessing substantial declines. The resilience of the Indian stock market during such occurrences has left foreign investors pleasantly surprised, prompting them to maintain their investments in Indian stock exchanges. This period aligns with the positive sentiments echoed by prominent financial agencies, as they express bullish outlooks on both the Indian GDP and stock market growth. The current scenario underscores the robust and mature nature of the Indian stock market, showcasing its ability to weather external shocks and instill confidence among a diverse pool of investors

In conclusion, the evolution of the Indian stock market, particularly during the challenging times of the COVID-19 pandemic and subsequent lockdowns, reveals a transformative journey marked by increased investor participation. The downturn in the market during the initial phases of the pandemic provided astute investors with opportunities to capitalize on undervalued stocks, leading to substantial returns. The introduction of discount stock brokers, coupled with heightened financial awareness and access to information through the internet, further democratized market participation. The resilience demonstrated by the market, withstanding foreign sell-offs and remaining relatively stable, has fostered confidence among investors, both domestic and foreign. The rising popularity of SIPs has emerged as a pivotal force, bolstering the influence of mutual funds and domestic institutional investors. As the Indian stock market continues to navigate uncertainties, the bullish stance from important financial agencies, coupled with the sustained growth in GDP and stock markets, signifies a positive trajectory. The current scenario not only reflects the maturation of the Indian stock market but also underscores its potential to attract and retain a diverse array of investors, contributing to the broader economic landscape.

Follow me on Twitter (X) @RawatAnshumaan

25 thoughts on “The Remarkable Journey of the Indian Stock Market from Turbulent Times to Present Resilience”
  1. Hello Neat post Theres an issue together with your site in internet explorer would check this IE still is the marketplace chief and a large element of other folks will leave out your magnificent writing due to this problem

  2. Somebody essentially lend a hand to make significantly articles Id state That is the very first time I frequented your website page and up to now I surprised with the research you made to make this actual submit amazing Wonderful task

  3. Hello i think that i saw you visited my weblog so i came to Return the favore Im trying to find things to improve my web siteI suppose its ok to use some of your ideas

  4. Thank you I have just been searching for information approximately this topic for a while and yours is the best I have found out so far However what in regards to the bottom line Are you certain concerning the supply

  5. Simply wish to say your article is as amazing The clearness in your post is just nice and i could assume youre an expert on this subject Well with your permission let me to grab your feed to keep updated with forthcoming post Thanks a million and please carry on the gratifying work

  6. I learned more new stuff on this weight reduction issue. Just one issue is that good nutrition is tremendously vital any time dieting. A huge reduction in bad foods, sugary ingredients, fried foods, sweet foods, red meat, and white flour products could possibly be necessary. Holding wastes harmful bacteria, and wastes may prevent ambitions for fat-loss. While a number of drugs quickly solve the matter, the unpleasant side effects aren’t worth it, and they also never provide more than a temporary solution. It is a known undeniable fact that 95 of fad diets fail. Many thanks sharing your notions on this website.

  7. Wow, wonderful weblog format! How long have you ever been blogging for? you make blogging glance easy. The whole glance of your website is magnificent, let alone the content material!

  8. This is the appropriate weblog for anyone who wants to search out out about this topic. You realize so much its virtually arduous to argue with you (not that I really would want匟aHa). You undoubtedly put a new spin on a subject thats been written about for years. Great stuff, simply great!

  9. I precisely wanted to thank you very much all over again. I do not know what I could possibly have implemented without the opinions revealed by you on this question. Previously it was a distressing circumstance in my opinion, but discovering the specialised technique you handled the issue took me to weep for delight. Now i am thankful for your guidance as well as hope you find out what a powerful job you happen to be accomplishing training the rest all through your blog post. I am sure you have never come across all of us.

  10. I would also like to add that in case you do not already have got an insurance policy or perhaps you do not remain in any group insurance, you may well gain from seeking the assistance of a health agent. Self-employed or people who have medical conditions normally seek the help of the health insurance dealer. Thanks for your short article.

  11. Terrific work! This is the type of information that should be shared around the net. Shame on Google for not positioning this post higher! Come on over and visit my site . Thanks =)

  12. excellent publish, very informative. I ponder why the opposite experts of this sector don’t notice this. You must proceed your writing. I’m confident, you have a great readers’ base already!

  13. Wow! This could be one particular of the most useful blogs We have ever arrive across on this subject. Basically Great. I’m also a specialist in this topic so I can understand your effort.

  14. Whats up very cool blog!! Guy .. Excellent .. Amazing .. I’ll bookmark your website and take the feeds I’m satisfied to seek out numerous helpful information here within the submit, we need develop extra techniques in this regard, thanks for sharing. . . . . .

  15. Greetings from Colorado! I’m bored to death at work so I decided to browse your website on my iphone during lunch break. I enjoy the knowledge you present here and can’t wait to take a look when I get home. I’m amazed at how quick your blog loaded on my cell phone .. I’m not even using WIFI, just 3G .. Anyways, amazing site!

  16. Usually I do not read article on blogs, but I wish to say that this write-up very forced me to try and do it! Your writing style has been amazed me. Thanks, very nice article.

  17. I’m really enjoying the design and layout of your site. It’s a very easy on the eyes which makes it much more pleasant for me to come here and visit more often. Did you hire out a designer to create your theme? Excellent work!

Leave a Reply

Your email address will not be published. Required fields are marked *