Is the Buffett indicator (Market cap to GDP ratio) the right indicator for stock market valuation? 

If you have been a seasoned investor, then you will not fail to correlate market returns to the GDP growth of a nation using the market cap to GDP ratio. GDP growth gives a quick sense of the size of the growth opportunity and in turn that of the stock market valuation. We call it the Big Picture.

Textbook wisdom says that market valuation follows GDP and that a market cap to GDP ratio of over 1 suggests over valuation and vice versa (This market cap to GDP ratio is also popularly referred to as Buffett indicator)

If the Buffet indicator works perfectly in the way it is defined, then investors can easily play around markets by buying and selling stocks or ETFs based on this ratio and pocket smart gains. But unfortunately, it hasn’t worked that way if we look at the facts that back these data points. 

In this article, let us try and understand what the Buffet indicator really points at, the disconnect between the GDP and market cap and how to interpret this for stock market decisions. 

Is the Buffett indicator (Market cap to GDP ratio) the right indicator for stock market valuation?

Buffet Indicator for countries

Here’s a quick look at the Buffet indicator (Market Cap to GDP ratio) of top 10 economies in terms of nominal GDP (image below). You will find that while US enjoys a high premium over GDP, countries such as China and Germany have a ratio of less than 1, even as Russia’s market cap is significantly depressed than its GDP! 

Note: (1) These are approximate values for GDP and stock market capitalisation. GDP data is for CY22 for most of the economies and FY22 for India. Market capitalisation is the approximate values as on current date. Both the data are taken from sources that are considered to be reliable.

(2) This data may sometimes be misleading if there are very large unlisted corporations in a country. But majority of large companies contributing meaningfully to economy seems to have listed in top countries mentioned in the graph. (Just for sample:  Saudi Arabia’s market cap averaged $60bn up to 2018 while it spiked past $3 trillion post Aramco’s listing).

This data can be easily deceptive, unless you find answers to some of the questions that this data poses. For example:

  1. Why is US’ market cap far higher than its GDP and China’s is far lower? 
  2. Why does Germany (let’s include UK for this purpose) as a large economy not have large stock market valuation? 
  3. Is Japan’s Market Cap at 1.4X GDP fair considering its low economic growth rate? Why has been it been afforded a higher ratio?

Let us try understand each of these cases. 

# 1 Market cap to GDP ratio – US vs. China

Presently, US is about a $25 trillion dollar economy while China is $18 trillion. For US, the market cap to GDP ratio is close to 2X while at the other extreme it is close to 0.7X for China. Historically for US, it has hovered far below 100%, barring the spike in 2001 during dot com. But then, it has consistently moved up in the last decade. This also coincided with the rise of companies from the technology sector that are global in nature. 

If we rewind it to the previous decade or before the 2009 financial crisis, the U S stock market index was dominated by oil and financial majors that derived their value largely from home economy. But the technology revolution created dominant companies that started ruling the world. If 2000s was about $100 billion valuation companies, the next decade was about $300- $400 billion valuation companies and this decade led to the birth of multiple trillion-dollar companies in US.

Take a look at this link for top companies by market value in the US. You can see that US has over 10 companies with over $500 billion in market value and more than 75 companies with market value above $100 billion. 

Now if we look at China, the economy is the second largest but is dwarfed by the US.  But if we look at top companies, there are just 14 companies with market value of over $100 billion, but none above $500 billion (there could have been Tencent and Alibaba if a government crackdown did not happen). 

Here’s a link to take a quick look into top companies by market value in China. The largest one is still Tencent Holdings at $380 billion followed by Alibaba at 4th at $222 billion and then the new energy (Li-battery, EV) enterprises like CATL and BYD at around $100 billion.  Out of 14 companies above $100 billion in market cap, half of them are public sector enterprises operating in domestic financial, energy, telecom, construction, and insurance sectors. 

If you go further down the order, the next 14 are $50 billion companies, with lot of domination from public sector enterprises again.  Largest online food delivery platform (Meituan) and a gaming company (NetEase) also find place among the $50 billion companies.  The ones from electronics, appliances, air conditioners, sports goods, automobiles, etc go far lower down the order in market cap. The conventional auto manufacturing companies (Great Wall, SAIC) are not even bigger than India’s Tata Motors or M&M or Maruti in Market Cap.

Why not multiple $100 billion private enterprises in manufacturing despite China being known as the factory of the world?  That will be something to ponder over and is a separate topic of discussion.

But to conclude based on available information, a larger proportion of public enterprises, lack of global brands and restrictive government policies in China seem to have created significant difference between the stock market capitalisation of these two countries. Even for large investors including large funds, whether their diversification to markets like China, seeing its economic growth and prosperity, have played out in terms of stock market returns has become questionable.

(Read this article that talks about how avoiding China has been a winning bet for some global funds. )

#2 Market cap to GDP ratio - Eurozone markets

Now let’s move to the major Eurozone markets (including UK for this limited purpose).

We know that Germany is the saviour of Euro Zone and the country with the largest GDP. Every time the Euro Zone lands in financial crisis, it is Germany that takes the centre stage in policy making to save the Euro. The next is France. Both are known to be industrial nations. Germany is a $4 trillion economy while France is $2.8 trillion. 

But the stock market data points out to significantly higher market capitalisation for France than Germany. How? In fact, France has a Buffett indicator ( market cap to GDP ratio) of 1.1 while it is only 0.6 for Germany. Let’s dig a bit deeper to understand what creates this meaningful difference. 

A quick look at top companies reveal that Germany has just 3 companies above $100 billion whereas France has over 6 companies above $100 billion. The largest German company has $150 billion in market Cap while the largest French company has $380 billion in market Cap. 

SAP, Siemens, Porsche, Merc, BMW, Volkswagen, etc. make for top German companies by market cap and they truly represent what Germany is known for – an industrial nation.

But which all make Top companies in France? They are LVMH, L’Oreal, Hermes, Dior, Essilor Luxxotica, Total and Schneider. Yes, it’s a whole bunch of beauty and fashion players dominating an industrial nation’s stock market index. The old-world manufacturing names you would expect such as Safran, Dassault, Thales, Legrand, Michelin, Renault, and Alstom are far low down the order.

While the German auto giants as well as French beauty and fashion majors find significant favour globally, including China, the fashion and beauty majors have ended up creating more shareholder value. But the auto industry has been less profitable and less value creative globally, barring Japanese major Toyota. 

The stock price charts of auto majors also shows that they are haven’t done anything in the last two decades (barring BMW). Disruption from EV makers like Tesla added to the woes of the sector while Chinese players are outselling Germans in the fast-growing EV segment.  

Worse in the Eurozone is Italy, with a Market Cap to GDP ratio of 0.32 and has NO $100 billion companies in its index while similar sized economy Spain does significantly better with a market cap to GDP ratio of 0.90 and fashion retailer Zara as the sole $100 billion company. 

You may have also observed from that data that UK beats Germany in stock market capitalisation with 7 companies in the $100 billion club Vs 3 for Germany despite being lower in GDP by a trillion dollar. UK still has its flagship oil and mining giants in top companies, carrying its stock market legacy.

To sum up, the Germany Vs France story is a lot different from the US Vs China. In the Eurozone story, it is about certain industries driving significantly higher shareholder value creation than others despite both the countries having globally recognised private sector enterprises.

#3 Market cap to GDP ratio - Japan

This is another interesting case study where the stock market of a nation with anaemic long-term growth is commanding a higher market cap to GDP ratio at 1.4 times than that of a high growth country like India at 1 time.  

Japanese GDP grew rapidly between 1980 and 1995 from $1 trillion to $5.5 trillion and has stagnated for three decades since, after the asset bubble (Nikkei Bubble) in 1989. A period of high economic boom combined with huge savings and investments eventually led to an asset bubble in 1989 and the collapse of that bubble left the country in long term deflationary spiral.

To put this in perspective, Japan was almost 45% of global stock market capitalisation at that time (Same as what US market cap is today). Economic growth averaged between 0-2% for three decades past 1990 due to this. Meanwhile, the stock market bottomed out (between 2009 and 2012) after two decades of decline and is now marching towards its older 1989 highs. Warren Buffett’s investments in Japanese conglomerates recently also gave a new life to the market.

While this was happening, Japanese corporations were earning through exports, and today they export $900 billion worth of goods annually. Hi-tech manufacturing sectors like automobiles, electronics, automation, and semiconductors lead the list of top companies in its stock market with nearly 5 companies above $100 billion and 20 companies above $50 billion. Japan born PAN Asian fashion retailer Uniqlo is at 6th position with a market cap of $73 billion.

This would not have been the outcome had the companies been largely generating revenue internally (within Japan), with unfavourable demographics and anaemic growth rates.  Toyota still stands tall as the most valued automobile company after Tesla, in an industry that is struggling to create shareholder value. 

Just to digress a bit and give you some contrast here - India’s case is just the opposite as majority of companies that contribute to the market capitalisation generate domestic revenues (financials, consumer, and automobiles) while the enviable services export companies also contribute meaningfully with a combined market value of over $370 billion. They have added a layer of high-quality companies leading to significant market cap contribution.

At this point of time, India has 12 companies above $50 billion in market cap and a sustainable high economic growth can produce significantly more number of such companies going forward. For financials, the blessing has been the high GDP growth rate over the last three decades, that enabled this mediocre RoE business (caped at 15-20%) to create significant value for shareholders. Had these financial companies been in Japan, this would not have been the case!

Coming back to Japan, the country’s respectable market cap to GDP ratio reflects the ability of private sector enterprises to triumph the adverse economic challenges and generate income outside of their home country. Imagine what would have been Japan’s market cap to GDP ratio if it had a sizable and vibrant domestic economy as well! 

Japan’s market cap is also 2X that of Germany. Germany is an economy that is similar in size to Japan. 

So, you see in this case the market cap can be at a premium and grow despite a slow growing domestic economy!

When is a stock market cap > GDP? (And vice versa)

The bottom line from the study of above markets is that stock market need not be an exact reflection of the size of the economy (GDP) or its growth rate. It can be far higher or lower than it. If this be the case, then a simple interpretation of market being over-valued or undervalued may not hold good! 

So let us first understand some of the important factors that make the stock market significantly more worthy than the GDP of a country: 

  1. Efficient private enterprises that deliver higher return on capital (RoCE and in turn RoE) resulting in high stock market value creation.  
  1. Ability of enterprises to grow beyond their home country, profitably, can significantly aid in higher stock market valuation relative to the GDP.
  1. Government policies skewed towards competitive capitalism and NOT towards crony capitalism and socialism can enhance stock market value creation.

An adverse combination of these three can paint a bleak picture to stock market investors, the size of the economy notwithstanding. This is true to some extent in the case of China’s stock market. 

Germany’s case is a different one where its dominant private enterprises failed to fetch respectable stock market valuation despite their global dominance and business friendly government policies as the private enterprises in some industries did not deliver high ROE unlike the ones in France. 

The lessons for investors looking at the $10-trillion India growth story

India has long enjoyed a healthy market cap to GDP ratio and relatively rich valuation among emerging markets due to high quality companies being part of the index, especially the high RoE private sector financials, IT services and consumer majors. This ratio saw a major take-off post 2002 and has stayed higher since then. Despite some hiccups in banking sector in the previous decade, the large banks are again back with class-leading return metrics. The number of companies with ability to generate business outside of home market will augment value creation, as we saw with IT sector in the past.  

As we have seen from our study of market cap to GDP ratio of other major countries, the future value creation in stock market will depend on high quality private enterprises that create value for shareholders.

As Warren Buffett has famously said; “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact”.

A classic example for this could be found in Tata Group that is known for leadership excellence but met with mixed results within the group. While TCS turned out to be a crown Jewel, untimely capital allocation into businesses with inferior economics (Tata Motors, Tata Steel, Indian Hotels) have led to inferior value creation in those flagship companies. Tata Motors is a far bigger company than TCS in terms of revenue, but it operates in an industry with reputation for poor economics globally.

Even with conglomerates such as Reliance and L&T, the value creation to shareholders in the last decade has happened by diversifying into businesses with better business economics.

For long term investors planning to profit from the $10 trillion India GDP story the following matter:

  • It matters a lot to narrow down on sectors and companies that can create shareholder value. Simply chasing themes and narratives can be deceptive. Even recently as in 2021, investors were deceived by the debut of many new-age tech companies at rich valuations. The largest one of these new-age techs (Zomato) is now worth over $10 billion. Is there a multi-billion-dollar enterprise hiding in this sector? Maybe. There is a hidden giant in Reliance (JIO Platforms comprising telecom, e-commerce, and media assets) whose value may be unlocked only at the time of its IPO. 
  • There is also lot of expectation built on “manufacturing” as a theme which requires relatively high capital (on fixed assets and working capital) compared to services or consumer businesses. Ascertaining whether they can operate with superior capital efficiency (RoCE) at a larger scale for long term will be key to profiting from this theme. 
  • We have seen the rise of new $10 - $50bn billion companies emerging in consumer segments such as fashion, Jewellery, retail, etc triumphing the age-old staple players (FMCG) in market cap and demonstrating superior capital efficiency. These may also be the stories that gain traction through the next $6.5 trillion GDP journey. There may be a Zara or Uniqlo hiding here.

Investors can use the observations from other markets on what kind of companies graduated to multibillion dollar enterprises and how they grew. It can be many things - from technology to brands to scale and their ability to tap a larger global market. But ultimately everything must happen with superior capital efficiency (RoCE and in turn RoE) for investors to benefit.  

The securities quoted are for illustration purposes only and are not recommendatory.

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10 thoughts on “Is the Buffett indicator (Market cap to GDP ratio) the right indicator for stock market valuation? ”

  1. Your observation on Tata putting more capital in steel and auto is very relevant. With further resources getting tied up in Air India , Tata group may be under severe pressure.
    Your view on this

    1. N V Chandrachoodamani

      Welcome your comments sir,

      A decade ago, the narrative was to go global and there was an EM/BRICS narrative as well. So Tata Group board also decided to go with that. Unfortunately that didn’t go well

      They had Cos like Trent (Westside, Zudio) & Titan even then which received less attention. But now they are turning out to be new Crown Jewels for the group. CROMA was born very late as well.

      I don’t know how Air India buy out will work, but it is good to see that there is significant domestic capital allocation this time. The industry is almost a duopoly with pricing discipline as well at this point of time (Unlike what happened to telecom when JIO entered with price war)

      We are also seeing ASK Investment Managers and Ex-HDFC Fund Manager Prashant Jain’s 3P capital making allocation to Indigo Airlines (at advantage if Tata’s maintain pricing discipline).

      Even Tata’s have put significant commitment to make Tata Motors an impactful player in domestic passenger car market.

      In the next decade, if domestic consumer-oriented businesses outshine for Tata’s, then it should be a very good outcome for the group, resulting from the capital allocation decisions of recent past.

      Thank you

  2. Vittal Venugopal

    Fantastic & brillant article! I am sure lot of thought & efforts has gone in to write it.

  3. Nice article, also one more parameter that can be checked is listed companies contribution to GDP/ Total GDP of a country. Many a times like today, contribution of listed companies to total GDP in India is increasing post covid at times at expense of small unlisted companies.

    1. N V Chandrachoodamani

      Welcome your comments sir

      Contribution to GDP is nothing, but the topline/revenue
      The bottom-line and RoCE will decide value creation and higher the value creation, higher the M Cap

      You are right w.r.t to rising share of organized sector/ listed Cos to GDP. That’s also evident from new consumer franchisees doing well and moving higher the M Cap order.

      If that matches with value creation potential of those sectors (High RoCE), then we may see expansion as well to our M Cap to GDP ratio.

      Thank you

    1. N V Chandrachoodamani

      Yes, you are right sir.

      Brazil has only 3 companies above $50 billion for such a large economy and that too commodity players followed by a dominance of financials in the top 10

      Sweden has relatively bigger sized Cos compared to the size of its economy and has produced multi-national Cos as well

      It also narrows down to the thought that value creation in stock market will depend on private enterprises and businesses that can create value to shareholders

      Thank you

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PrimeInvestor Financial Research Pvt. Ltd., its Associates, the Research Analysts or their relatives holds ownership of 1% or more, in respect of the said issuer company(ies)? – NO

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The RA may terminate or suspend rendering of Research Services to the client in the following circumstances:

  1. On account of suspension/cancellation of registration of RA by SEBI. In case of suspension of certificate of registration of the RA for more than 60 (sixty) days or cancellation of the RA registration, RA shall refund the fees, on a pro rata basis for the period from the effective date of cancellation/ suspension to end of the client’s subscription period.
  2. The RA voluntarily chooses to terminate its Research Service. In the event of such termination of the Research Service, the RA shall refund the fees, on a pro rata basis for the period from the date of such termination of research service to end of the client’s subscription period.

9. Grievance redressal and dispute resolution:

Any grievance related to:

  1. nonreceipt of research report, or
  2. missing pages or inability to download the entire report, or
  3. any other deficiency in the research services provided by RA

shall be escalated promptly by the client to the person/employee designated by RA, in this behalf as under:

Name: Bhavana Acharya
Designation: Director & Compliance Officer, PrimeInvestor Financial Research Pvt Ltd
Email: [email protected]

The RA shall be responsible to resolve grievances within 7 (seven) business working days or such timelines as may be specified by SEBI under the RA Regulations.

RA shall redress grievances of the client in a timely and transparent manner. Any dispute between the RA and his client may be resolved through arbitration or through any other modes or mechanism as specified by SEBI from time to time.

If the client is not satisfied with the response of the RA, he/she can lodge his/her grievances with SEBI at scores.sebi.gov.in. Alternatively, the client may also write to any of the offices of SEBI. For any queries, feedback or assistance, please contact SEBI Office on Toll Free Helpline at 1800 22 7575 / 1800 266 7575

Details on grievances are available on the Website as follows: https://primeinvestor.in/ra-grievance/

10. Additional clauses:

Scope of the Research Service: The Research Services will be limited to providing independent research recommendation and shall not be involved in any advisory or portfolio allocation services. The Research Services are not meant to be tailor-made or customized solutions that specifically apply to each client based on his/her risk profile.

The RA never guarantees the returns on the recommendation provided. Investor shall take note that investment/trading in stocks/Index or other securities is always subject to market risk. Past performance is never a guarantee of same future results. The RA shall not be responsible for any loss to the Investors.

This service is not directed for access or use by anyone in a country, especially the USA, Canada or the European Union countries, where such use or access is unlawful or which may subject PrimeInvestor Financial Research Pvt Ltd or its affiliates to any registration or licensing requirement.

The Research Service, including recommendations, research reports, updates, and other information will be accessible through the RA’s website https://primeinvestor.in only. Such recommendations and updates will not be provided over phone calls.

Fees: Our current fee structure, the term and duration of our subscription for our Research Service, can be viewed on our website: https://primeinvestor.in/prime-pricing. Eligibility for any discounts is ascertained at the time the client subscribes. Any such discount and its tenure shall be at the discretion of the RA.

Subscription and access to content services fall under the purview of Goods and Services Tax (GST) as per the current indirect taxation policy, Government of India. Unless otherwise indicated, prices stated on our website are exclusive of applicable GST, any applicable value added tax (VAT) or other sales taxes. We are a business-to-consumer (B2C) service provider and we do not commit to provide any input tax credit on GST charged on subscription to our Research Service.

We may change the Subscription Fees and charges then in effect, or add new fees or charges which will take effect at the end of the client’s subscription period, by giving notice in advance and an opportunity to cancel renewal of the subscription.

Subscription Access & Renewal: Subscription to the Website commences immediately on the realisation of payment of the Subscription Fees. Subscriptions are set to be renewed automatically at the end of the subscription period.

Unless the client notifies us before the end of his/her subscription period, or the client cancels the auto-renewal mandate within the period specified by law, that the client does not wish to renew his/her subscription, the client’s subscription will renew for the period defined by the client’s subscription plan. We will charge the subscription using the same payment method that you previously used.

Although the client may notify to us his/her intention to his/her subscription, such notice will only take effect at the end of his/her then current subscription period, and he/she will not receive a refund other than as set out under Clause 8 in these Terms.

The client may notify us of his/her wish to cancel his/her subscription by sending an email to [email protected]. The client must provide at least 5 business days advance notice for this to be implemented.

Refunds: There can be no cancellation and refund of subscription fee paid once the subscription is active, other than as stated in Clause 8 of these Terms. If the client is entitled to a refund as specified under Clause 8 of these Terms, the RA will credit that refund to the card or other payment method used by the client to submit payment, unless it has expired - in which case the RA will contact the client to proceed with the refund. If we do issue a refund or credit due to circumstances outside the obligations specified under Clause 8, we are under no obligation to issue the same or a similar refund in the future.

General disclaimers: The recommendations made herein in the Research Services are expression of views and/or opinions and should not be deemed or construed to be advice for the purpose of purchase or sale of any security, nor a solicitation or offering on any investment/ trading opportunity on behalf of the company, AMC, insurance company, or issuer of security referred to herein.

The content and research reports generated by the RA does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities.

The information/ opinion/ views mentioned in research reports or by the RA are not meant to serve as a professional guide to the client or recipients of this Report. The research report, recommendation, or any other content published by the RA do not assure or guarantee any minimum or fixed returns to the client or recipients of the reports/ recommendations/ content.

Use of this information is at the client’s own risk. The client must make his/ her own investment decisions based on his/her specific investment objective and financial position and using such independent advisors as he/she believes necessary. The services rendered by the RA are on a best-effort basis. All information in the content or research report of the RA is provided on an as is basis. Information is believed to be reliable but the RA does not warrant its completeness or accuracy and expressly disclaim all warranties and conditions of any kind, whether express or implied.

While due care has been taken to ensure that the disclosures, information, and opinions given are fair and reasonable, PrimeInvestor Financial Research Pvt Ltd and/or none of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information/ opinions/ views contained in the research report and recommendations that form part of the Research Service, and/or mails, social media or notifications issued by PrimeInvestor Financial Research Pvt Ltd or any other agency appointed/authorised by PrimeInvestor Financial Research Pvt Ltd. Returns and performance figures mentioned in the research report represent past performance and should not be constituted to be future returns or guaranteed returns.

Any agreements, transactions or other arrangements made between the client and any third party named on (or linked to from) the Website are at your own responsibility and entered into at your own risk. Any information that you receive via the Website, whether or not it is classified as “real time”, may have stopped being current by the time it reaches you. Market price information may be rounded up/down and therefore may not be entirely accurate.

The purpose of these disclosures is to provide essential information about the Research Services in a manner to assist and enable the prospective client/client in making an informed decision for engaging in Research Services before onboarding.

History, present business and background: PrimeInvestor Financial Research Private Limited is registered with SEBI as Research Analyst with registration no. INH200008653. The Research Analyst got its registration on August 19, 2021 and is engaged in offering research and recommendation services.

Disciplinary history: There are no pending material litigations or legal proceedings against the Research Analyst. As on date, no penalties / directions have been issued by SEBI under the SEBI Act or Regulations made thereunder against the Research Analyst relating to Research Analyst services.

Details of the RA's associates: No associates.

Usage of Website Content: This Website is controlled and operated by the RA. All material, including research reports, recommendations, portfolios, ratings, lists of financial products, illustrations, statements, opinions, views, photographs, products, images, artwork, designs, text, graphics, logos, button icons, images, audio and video clips and software (collectively, “Content”) are protected by copyrights, trademarks and other intellectual property rights that are owned and controlled by the RA or by other parties that have licensed their material to us.

Except where otherwise agreed in writing with the RA, material on the Website is solely for the client’s personal, non-commercial use. Except as provided below, the client must not copy, reproduce, republish, upload, post, transmit or distribute such material in any way, including by e-mail or other electronic means and whether directly or indirectly and the client must not assist any other person to do so.

Without the prior written consent of the RA, modification of the materials, use of the materials on any other web site or networked computer environment or use of the materials for any purpose other than personal, non-commercial use is a violation of the copyrights, trademarks and other proprietary rights, and is prohibited. Any use for which the client receives any remuneration, whether in money or otherwise, is a commercial use for the purposes of these Terms.

The client may occasionally distribute a copy of a research report, or a portion of the same, from the Website in non-electronic form to a few individuals without charge, provided the client includes all copyright and other proprietary rights notices in the same form in which the notices appear, original source attribution, and the phrase “Used with permission from PrimeInvestor Financial Research Pvt. Ltd.”

While the client may occasionally download and store research reports or information from the Website for his/her personal use, he/she may not otherwise provide others with access to the same. The foregoing does not apply to any sharing functionality we provide through the Website that expressly allows the client to share Content or links to Content with others. In addition, the client may not use Content he/she has downloaded for personal use to develop or operate an automated trading system or for data or text mining.

The client agrees not to rearrange or modify the Content available through the Website. The client agrees not to display, post, frame, or scrape the Content for use on another website, app, blog, product or service, except as otherwise expressly permitted by these Terms. You agree not to create any derivative work based on or containing the research products and Content. The framing or scraping of or in-line linking to the Services or any Content contained thereon and/or the use of webcrawler, spidering or other automated means to access, copy, index, process and/or store any Content made available on or through the Services other than as expressly authorized by us is prohibited.

The client further agrees to abide by exclusionary protocols (e.g., Robots.txt, Automated Content Access Protocol (ACAP), etc.) that may be used in connection with the Research Services. The client may not access parts of the Research Services to which he/she is not authorized, or attempt to circumvent any restrictions imposed on your use or access of the Services.

As a general rule, the client may not use the Content, including without limitation, any Content made available through one of our RSS Feeds, in any commercial product or service, without our express written consent.

The client may not create apps, extensions, or other products and services that use our Content without our permission. The client may not aggregate or otherwise use our Content in a manner that could reasonably serve as a substitute for a subscription to the Website.

The client may not access or view the Services with the use of any scripts, extensions, or programs that alter the way the Services are displayed, rendered, or transmitted to you without our written consent.

The client agrees not to use the Services for any unlawful purpose. We reserve the right to terminate or restrict the client's access to the Website if, in our opinion, the client's use of the Services may violate any laws, regulations or rulings, infringe upon another person's rights or violate these Terms.

Prohibited content: The Website includes comments sections, blogs and other interactive features that allow interaction among clients and between clients and the RA. We call the information posted by or contributed by users “Contributed Content.” In the course of availing of the Research Services or uploading any post or comment on the Website, the client shall not post any Contributed Content that (i) contains nude, semi-nude, sexually suggestive photos, (ii) tends or is likely to abuse, harass, threaten, impersonate or intimidate other users of the Website and/or Research Services, (iii) is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely to use or have access to the Website and/or Services, or (iv) otherwise violates, is prohibited or restricted by applicable law, rule or regulation, is offensive or illegal or violates the rights of, harms or threatens the safety of other users of the Website and/or Services (collectively “Prohibited Content”).

We reserve the right to cease to provide the client with the Research Services or access to the Website, or terminate your subscription, with immediate effect and without notice and liability, for violating these Terms, applicable law, rules or regulations and reserves the right to remove Prohibited Content which is in violation of these Terms, or is otherwise abusive, illegal or disruptive. The determination of whether any content constitutes Prohibited Content, violates these Terms, or is otherwise abusive illegal or disruptive, is subject to the sole determination of the Firm.

Changes to Research Services: We are constantly endeavouring to improve the quality of Research Services provided to our clients. Due to this, the form and nature of the Research Services provided may change from time to time without any prior notice to the client. We reserve the right to introduce and initiate new features, functionalities, components to the Website and/or Research Services and/or change, alter, modify, or discontinue existing ones without any prior notice to the client.

Warranty and liability disclaimer: The Website, Research Services, and all the materials and services, included on or otherwise made available to the client through this Website is provided by the RA on an “as is” and “as available” basis without any representation or warranties, express or implied except otherwise specified in writing. Without prejudice to the foregoing paragraph, the RA does not warrant that:

  • This Website and/or Research Services will be constantly available, or available at all;
  • The information on this Website or provided through the Research Services is complete, true, accurate or not misleading; or
  • The quality of any products, services, information, or other material that you obtain through the Website or Services will meet your expectations.

The RA, to the fullest extent permitted by law, disclaims all warranties, whether express or implied, including the warranty of merchantability, fitness for particular purpose and non-infringement. The RA makes no warranties about the accuracy, reliability, completeness, or timeliness of the Website, Research Services, Content, Contributed Content, Services, software, text, graphics and links.

The RA does not warrant that this Website, Research Services, information, content, materials, or any other material included on or otherwise made available to you through this Website, their servers, or electronic communication sent by the RA are free of viruses or other harmful components.

Nothing on this Website constitutes, or is meant to constitute, advice of any kind.

Indemnification: The client:

  1. Represents, warrants and covenants that no materials of any kind provided by him/her will:
    1. Violate, plagiarise, or infringe upon the rights of any third party, including copyright, trademark, privacy or other personal or proprietary rights; or
    2. Contain libellous, Prohibited Content or other unlawful material;
  2. Hereby agree to indemnify, defend and hold harmless the RA and all of the RA’s officers, directors, owners, agents, customers/clients, information providers, affiliates, licensors and licensees (collectively, the “Indemnified Parties”) from and against any and all liability and costs, including, without limitation, reasonable advocate’s fees, incurred by the Indemnified Parties in connection with any claim arising out of any breach by the client of these Terms or the foregoing representations, warranties and covenants. The client shall cooperate as fully as reasonably required in the defence of any such claim. The RA reserves the right, at its own expense, to assume the exclusive defence and control of any matter subject to indemnification by the client.

Applicable law: This Website, including the Content and Contributed Content and information contained herein, and the provision of Research Services shall be governed by the Securities and Exchange Board of India, laws of the Republic of India and the courts of Chennai, India which shall retain exclusive jurisdiction to entertain any proceedings in relation to any disputes arising out of the same. As such, the laws of India shall govern any transaction completed using this Website.

Information gathered and tracked: Information submitted or collected on the Website or pursuant to the use of the Services is stored in a database. Specifically, we store the username, name, e-mail address, contact number, as submitted or collected on our Website or through the provision of the Research Services. We may use such information to send out occasional promotional materials, including alerts on new Services available, or other promotional and marketing material relating to our clients and customers.

In accordance with the Information Technology Act 2000, the name and the details of the Grievance Officer at PrimeInvestor is provided below:

Mr. Srikanth Meenakshi
PrimeInvestor Financial Research Pvt. Ltd., Registered office: 659, 4th Avenue, D-Sector, Anna Nagar Western Extension, Chennai 600 101.
Email: [email protected]

11. Mandatory notice:

Clients shall be requested to go through Do’s and Don’ts while dealing with RA as specified in SEBI master circular no. SEBI/HO/MIRSD-POD-1/P/CIR/2024/49 dated May 21, 2024 or as may be specified by SEBI from time to time.

12. Optional Centralised Fee Collection Mechanism:

SEBI has operationalized a centralized fee collection mechanism for IA and RA. Under this mechanism, clients shall pay fees to IAs/RAs through a designated platform/portal administered by a recognized Administration and Supervision body. This is an optional mechanism for the registered entities. At this time, PrimeInvestor has opted out of this fee collection mechanism. Therefore, all subscription payments for the Research Services will be through the modes as specified in Clause 5 of these Terms.

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