On a day-to-day view what could all of this mean for investors? India is the busiest initial public offering market in the world with 6,000 listed companies and approximately 2,000 with a market capitalisation in excess of $100 million. This translates to a broad and deep investment opportunity set, which, we believe allows for active managers to outperform due to the dispersion within these companies. There's also various gradations of quality of investment when it comes to management teams and business models, which make it fertile ground for the long-term investor.
India's mantle as the best-performing market in the world for the last two decades will inevitably attract scepticism around whether that can continue – but we've been hearing the same argument for almost 20 years and in rupee terms or in dollar terms, it's better than any market in the world, in our view. Only the US comes close, but it has experienced a concentrated rally driven by large tech and trillions of dollars of market cap created by a small handful of companies. Meanwhile in India, the rally has been broader based – and we expect that to widen and lengthen.
I've been investing in India for over twenty years. In that time, stability has come to the government, the economy has continued to grow at a high rate, and most companies have gone through a revolution in how they treat minority shareholders.
From a top-down perspective, the direct result is clear to me: the country's listed market cap has increased by ten-fold. I've also seen evident changes on a bottom-up basis and this comes through in every interaction in India: the collective intelligence of management teams is higher, signalled by more thoughtful capital allocation; the focus on investing in and growing in India, rather than on creating global empires, is readily apparent; and the excitement to participate in India's growth story is palpable among executives and investors alike. In a capital market context, this is no longer an emerging market. India has emerged.
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