📊 Equity Risk Premium (ERP)
Are you being paid enough to take equity risk over government bonds?
Nifty PE Ratio
20.3
Earnings Yield (1÷PE)
4.94%
10Y G-Sec Yield
6.48%
ERP Spread
-1.54%
🟠 Bonds Competitive
What this means for investors:
The 10-year G-Sec (6.48%) now offers a better yield than Nifty earnings (4.94%). Risk-free government bonds are giving you more income than the stock market — a cautionary signal suggesting equities are expensive on a yield basis.
How to read: Earnings Yield = 1 ÷ PE Ratio, converted to a percentage. When this yield exceeds the 10-year government bond yield, equities are theoretically compensating you for the extra risk. When it doesn't, you're taking equity risk for less return than a risk-free bond — a classic warning sign of overvaluation.
