Indian equity returns since 1900

Overview

This project uses listed Indian company data beginning in 1909 to examine the long-run evolution of equity market performance and importance. It finds no increase in overall stock market importance until the 1980s, and constructs a new annual series of Indian equity returns for 1900–1959. The analysis shows that equities generated a positive real return and risk premium over the risk-free asset. Over the very long run, the study documents an unprecedented market rerating that drove a surge in equity performance after 1991 following liberalisation. It further shows that an investor with access to listed Indian equities in both London and Bombay during the colonial period would have experienced similar performance outcomes and benefited from investing across both markets.