Narendra Modi birthday: India’s Prime Minister (PM) Narendra Modi, currently serving his third term as the country’s leader, turned 75 today, September 17. His time in office has coincided with significant developments in the Indian stock market, making it a fitting moment to reflect on the market’s performance during this period.
Ahead of his first term, the market was rife with anticipation of reforms, but the scale of compounding has been larger than expected. From May-end (May 26, 2014), when he took oath, to today, September 2025, Nifty and Sensex have almost increased fourfold.
Then the Nifty index hovered around the 7,360 mark, and currently it is trading above 25,100 levels, translating into returns of 240%. Its BSE counterpart Sensex was at 24,690 levels and has now climbed to above 82,000 — marking gains of nearly 235%.
The BSE 500, which, like the S&P 500, is made of a similar quantum of stocks and captures the wider universe, has delivered a nearly 288% return, while the BSE Midcap and BSE Smallcap indices have emerged as real outliers. The BSE Smallcap index has jumped 491% while the BSE Midcap index is up 435%.
“This means wealth creation wasn’t restricted to a few large names — India’s broader market massively outperformed. By comparison, the Dow Jones moved from 16,717 to 45,883, rising 174.6% and the S&P 500 rose about +243.9%, moving from 1,923 → 6,615. India’s broader indices have thus delivered some of the strongest global equity compounding in the last decade,” said Harshal Dasani, Business Head at INVAsset PMS.
Even as the Indian stock market has emerged as a laggard in the current year, its returns far eclipse those of the index. The MSCI EM index is up just 27% in 11 years.
The Modi government’s policies, widening investor participation and capex revival have been key drivers behind the stock market rally. From reforms like GST, IBC, to PSU bank recapitalisation, and direct benefit transfers, the government focused on improving efficiency and financial inclusion.
Furthermore, the focus on capex also fuelled growth for listed companies from sectors like railways, infrastructure and defence. In FY26, the budget allocates ₹11.11 lakh crore (3.4% of GDP) to capital expenditure.
A surge in retail participation, especially since the COVID-19 pandemic, has also been a driver of the stock market. According to the Economic Survey, investor participation has been a contributor to the secondary market growth, with the number of investors growing from 4.9 crore in FY20 to 13.2 crore as of 31 December 2024.
The Bank Nifty has jumped 259% even as the Nifty PSU Bank index growth has been slower at around 80%.
“Nifty Bank’s growth reflects the journey from NPA-laden balance sheets to stronger capital ratios and double-digit credit growth. In contrast, Nifty PSU Bank is a reminder that reforms took longer to re-rate state-owned lenders,” said Dasani.
Meanwhile, infrastructure and energy themes, supported by record public capex and a focus on self-reliance, did well. Nifty Energy gained 244% while the Nifty CPSE index added 147%.
At the same time, consumption-focused Nifty Auto rallied the most in the last 11 years, jumping 316%. The latest round of GST rate cuts has also been a key contributor to this rise. The Nifty IT index also followed suit with an over 300% rally, a testament to India’s tech leadership.
With corporate earnings expected to grow at a 10-12% CAGR over FY26-27, coupled with moderating global rates and stable oil, this is achievable within Modi’s current term, said Dasani.
The risks remain global: a sharp crude spike, global recession, or derating of cyclicals.
