Sensex at 150,000 by 2029: The ultimate compounding machine
equity investment was in 1979, the same year that the BSE Sensex was constituted with a starting value of 100. Over the next 45 years, that 100 has ballooned to 75,000 today, compounding at a handsome rate of 15.85% to be precise.
Looking back, the story of the Sensex is the story of India in a sense. In 1979, India was virtually a basket case in the global scheme of things, with a GDP of barely $130 billion. In fact, in 1990, the country went nearly bankrupt with forex reserves dwindling to a few months of our imports. Then came the IMF bailout package, and India has not looked back since.
It took India over 60 years post-independence to clock its first $1 trillion of GDP. That done, the second and third trillion dollars of GDP came in just seven years each, and we are close to the fourth trillion dollars, taking just three years. India is today the fifth-largest economy in the world and is poised to be the third-largest soon. Our forex reserves are at almost $650 billion.
Of course, as with any economy and market, the India and Sensex journey is not one-way up. There have been quite a few boom-bust episodes — the Harshad Mehta case in 1992, the dotcom boom-bust in 2000, the global financial boom-bust in 2008-2009, and more recently, the pre-and post-Covid boom-bust-boom. But still, as my pet quote goes, in India, the downs are temporary and the ups are permanent.
So, where do we go from here? This question can be answered in multiple ways. First, the doubling of Sensex from 37,500 to 75,000 happened in just
