Indian Equity Market (Sensex) Performance over longer period

BSE Sensex (BSE 30) is a free float market weighted index consisting of India’s thirty largest, well established and financially sound companies. Sensex market cap currently stands close to Re 45 lac Cr (USD 658 Bn).

Sensex indices base year is 1978-79 & started with a base value of 100 in 1 April 1979. Sensex has moved a lot over years and current level stands at 26,101. Thus providing an CAGR return of 16.2% since inception (over 37 years).

Sensex Yearly return Since FY 2001 is as shown in the table below:

Sensex Indices movement since 2001 is as shown in the chart below.

Sensex out of last 15 years; 11 years ended in positive. Sensex CAGR returns since CY 2001 stands at 12.63 % (without dividend yield). Assuming a dividend Yield of 2%, Sensex total return since FY 2001 is approximately 14.63%.

Conclusion: Equity markets have been significant wealth creator over years (CAGR of 14.63% since CY 2001, 11 out of last 15 years ended year positively). Investors by taking exposure to equity markets can make their money work better for them.

To get clarity a Rs 1 Lac investment in 2001 into FD (average return 8%) would have made value of 3.17 Lac over 15 years while same investment would have made value of 7.75 lac (144% higher than FD returns)