Until the pandemic, India’s stock market was like another world that Dilip Kumar never had a reason to visit.
“I invested in all the things I was using daily,” he said.
The MSCI India index is up about 30 percent this year — nearly twice the return of the global index — while India’s benchmark 30-share S&P BSE Sensex is up roughly 25 percent.
The company hit its target of raising $2.5 billion — making the offering the biggest in the country’s history and valuing the company at more than $20 billion.
At the same time, the government of Prime Minister Narendra Modi is trying to make India more self-reliant, a boon to domestic businesses offering everyday goods and services, while trying to bring more citizens — and their money — into the formal economy.
“There is pent-up demand among the upper middle class, who have been rushing to the market,” said Jiban Mukhopadhyay, a corporate economics professor emeritus at the S.P.
Their confidence has been buoyed by the huge stakes that institutional investors overseas are taking in companies that have gone public this year.
“India really stands out this year, with China decelerating,” said Todd McClone, a portfolio manager at William Blair’s Emerging Markets Growth Fund.
Emerging markets like India can often be at the mercy of decisions made by investors on the other side of the globe.
Economists also point to an uneven recovery from the pandemic that has pushed many Indians back into poverty.
Meant to tamp down money laundering, the policy banned the most widely circulated currency notes and wiped out the savings of families and small businesses overnight.
Then, two months later, the Reserve Bank of India began the same kind of quantitative easing programs that the Federal Reserve and other central banks instituted to support their domestic economies.
Growth began to slow — it was down to just 4.9 percent in the third quarter — putting pressure on debt-laden firms that rely on continuously fast growth to pay their creditors.
India was slammed by such a situation in 2013: When the Federal Reserve began to step back from low-interest rate policies after the 2008 financial crisis, investors pulled their money from India.
The young people who have helped speed the country’s embrace of new technologies will put pressure on the government to keep up the rapid economic expansion.