By Daksesh Parikh. Executive Editor, Business India

Sensex @ 50000 is a historic event. What do you have to say?

This has been a journey since 1979, the year in which the Sensex had been benchmarked. 50000 in 42 years is indeed a great achievement. Rs1 invested in 1979 would in 42 years have gone up to Rs70,000 if one takes into account dividends and other income on investments. Returns of 700x. No other asset class, be it gold or property, would have yielded such returns. Markets test investors’ patience. If one remains invested in strong companies for a longer period of time, this will yield similar returns, probably in a much shorter period. 

Do you feel there is a need to widen the investor base, given that there are only five crore investor accounts with the depositories?

This is a fallacious argument. Demat accounts are only a proxy for looking at the investor base. One has to see the investors in EPF/PFRDA/PF who are indirectly investing in markets. A huge number of investors in MF do not have depository accounts. In the BSE there are more than six crore accounts. If one account holder has a family of four to five persons, the total population supported by investors is more than 30 crore. In the case of the BSE itself, over the last one year we added more than 1.25 crore accounts. These were largely from young people. A six-crore investor population is more than the population of several countries and we may be amongst the top 15/20 countries in the world in terms of our investor population. The only requirement for becoming an investor is a PAN card. The majority of Indian do not have a PAN card and are thus prevented from investing.

Has the rerating of India been responsible for the growth in the Sensex?

Definitely. India has handled the Covid situation very well and due credit must be given to Narendra Modi for his leadership in handling such a crisis. We have a much larger population than the US and EU but our infection rates and death rates per million, during Covid, are much lower than several developed countries. We are known to be the vaccine capital of the world. Pfizer’s vaccine is priced at $70/80 while Indian vaccines are priced at less than $3. We have definitely been rerated in the last 10-12 months. Foreigners are looking at India in a different way. This is one of the reasons why FPIs have invested heavily in the country. We Indians have to be less critical of ourselves. We are disciplined and responsible, as a society, and this is one of the reasons foreigners have chosen to invest in India.