India Opportunity

More than twenty-five years ago, India embarked on a journey of economic liberalization, opening its doors to globalization and market forces. We, and the rest of the world, have watched as the investment and trade regime introduced in 1991 raised economic growth, increased income levels and gave consumers choice, while reducing poverty significantly. Today, India is a $3 trillion economy moving towards the $5 trillion mark as the growth rate picks up. The foundation has been laid with numerous changes and policy initiatives in place.

Over these years, India has consistently had one of the highest GDP growth rates across the globe. Successive Indian governments have steadily liberalised policies related to investments (domestic and foreign), banking, infrastructure, real estate, manufacturing, trading and several other aspects across industries. The combination of these factors has created a situation that is unique in India’s history as an independent country. Business growth has led to individual prosperity which is, in turn, leading to explosive growth of further entrepreneurial opportunities. Although India’s per capita income still places it in the list of “developing countries”, a significant population segment has emerged that is truly middle-class. India’s urban population has grown dramatically over the last two decades, particularly through migration into the major metropolises., These metros now have a significant proportion of middle income and upper income households residing there.

Unlike many other countries, India’s population profile will remain young for a long time, as mentioned earlier.

Rising consumption across urban India, improving rural prosperity combined with infrastructure and corporate investment have created several investment opportunities in India. These opportunities are across many sectors and geographies within India.

India is a fantastic place for stock picking.
  • Fastest growing major economy in the world
  • India is now the 5th largest economy in the world, but has limited weightage in any index.
  • Attractive macros, domestic demand driven economy
  • Hundreds of small companies to choose from
  • Information availability reduces as you go down the market cap spectrum
  • At the cusp of a new capex cycle, aspirational consumption growing rapidly
  • Fruit of reforms such as Goods and Services Tax (GST), bankruptcy code, higher tax compliance will play out going forward
  • Digital transfer framework for subsidies will help plug leakages and sustain fiscal deficit
  • Challenges on infrastructure, job creation, labour reform, rural incomes remain
Enablers for growth :
  • 2nd pivot around manufacturing is now in place, services doing very well (software, pharma)
  • Push for Make in India, Production linked incentive scheme, EV Vehicles
  • Major push in electronics, Fab and Chip industry
  • Capex cycle coming closer to take off – last one was 2010
  • Digital led fin-tech developments and start up / venture capital driving innovation across sectors, industries
  • Corporates highly optimistic on the economy going forward and supportive of government policy
  • Major push in infrastructure – multi lane highways, dedicated freight corridors, ports are being built