BSE-500 and SENSEX have the potential to 16x in the future.

BSE-500 and SENSEX are well known stock market indexes of the Bombay Stock Exchange.

The market capitalisation of the BSE-500, which is the larger of the two indexes, is around $4840B, which is 93% of the total market capitalisation of the Indian stock market.

How can we estimate the growth potential of this index?

We can for example look at the USA in 1990, before the globalisation was very much developed. So most of the US companies were quite domestic but the market was still very developed, not as much as today, but still a very developed economy. The market cap of the SP500 in 1990 was around $6037B, which is $14573B by today’s money. With a US population of 250M people, that is $58288/person.

My hypothesis is that India has the potential to become as developed as the US was in 1990. Today India has around 1430M people, which concludes to $3641 BSE-500 market capitalisation per person.

If the potential for India is $58288/person the BSE-500 has the potential to 16x.

I think investing in the BSE-500 or SENSEX will be a very good investment in the long run under the assumption that the Indian economy will develop further.