The sensex scaled the 50k mark for the first time in January and rose steadily to break above the 60k mark later in the year as Reliance Industries as well as leading software and financial stocks rallied. Starting at 47,751 points, and despite the weakness that was seen in the last two months of the year, the sensex ended 2021 at 58,254 points, up 22%, while the Nifty on NSE rallied 24% from 13,982 to 17,354. The rally made investors richer by about Rs 81 lakh crore with the BSE’s market capitalisation closing the year at Rs 269 lakh crore.
HDFC Securities MD & CEO Dhiraj Relli said the market cap-to-GDP ratio touched an all-time high globally and in India due to large liquidity flows, low interest rates, expectations of early return to normalcy and low returns from other asset classes.
Among various things, the bull rally in the Indian market led to the emergence of tech-driven, consumer companies on the public market through the IPO route. Food delivery app Zomato was the first major one to show the path, which was quickly followed by online cosmetic retailer Nykaa, techenabled financial products retailer Policybazaar and digital payments solutions provider Paytm. While Zomato and Nykaa had blockbuster D-Street debuts, Policybazaar struggled and Paytm left many investors poorer.
The relentless rally on DStreet also gave birth to a virtual race between Mukesh Ambani, the head of RIL, and Gautam Adani, the head of Adani Group, for the crown of Asia’s richest.
A strong stock market for most part of 2021 also attracted retail investors to open demat accounts in record numbers and start trading. The rally also prompted risk-averse investors to take the mutual fund route with the November-end assets under management at a record Rs 37. 3 lakh crore and monthly SIPs at just over the Rs 11,000-crore mark, AMFI data showed.