According to Jefferies, India, with a consistent 10-12 percent USD Compound Annual Growth Rate (CAGR) over the last two decades, has now positioned itself as the fifth-largest equity market globally. The brokerage firm anticipates that India’s market capitalization is poised to reach $10 trillion by 2030.
In a recent report, Jefferies highlighted that ongoing reforms are expected to sustain India’s status as the “fastest-growing large economy.” Additionally, the firm noted that robust trends in domestic investment flows have contributed to reduced market volatility, while historically low foreign ownership levels provide a valuation buffer.
Moreover, Jefferies pointed out the presence of a Return on Equity (RoE)-focused corporate sector, comprising 167 companies with market capitalizations exceeding $5 billion, which offers investors a wide array of investment opportunities.
The brokerage underscored that over the past decade, India’s GDP has demonstrated a 7 percent Compound Annual Growth Rate (CAGR) in USD terms, reaching $3.6 trillion and elevating India from the 8th to the 5th largest economy globally.
Jefferies noted that despite the impact of several significant reforms such as the bankruptcy law, GST implementation, Real Estate Regulation Act (RERA), and demonetization – which spurred the digital economy and formalization but adversely affected short-term growth – the GDP continued to expand.
Looking ahead, Jefferies projects that India’s GDP will surge to $5 trillion over the next four years, propelling it to become the world’s third-largest economy by 2027, surpassing Japan and Germany. This growth trajectory is anticipated to be driven by demographic advantages, including a consistent labor supply, bolstered institutional strength, and enhancements in governance.
India is anticipated not only to sustain a growth rate of 6 percent over the next five years but also to emerge as a standout performer amidst a global landscape where many major economies are forecasted to experience declining growth rates. The brokerage contends that India’s rising growth trajectory, especially in comparison to developed nations, is poised to facilitate its rapid ascent to the third position in the global GDP rankings before the decade concludes.
