What are Penny Stocks in India - Pros cons how to trade

What are Penny Stocks in India? High Risk, Explosive Returns!

A complete overview of Penny stocks in India: Hello Investors! Penny stocks are the darlings of new investors. The low market price of these stocks makes them quite attractive to beginners. However, there are a number of things that an investor should know before investing in penny stocks. In this post, we are going to discuss penny stocks, their pros and cons, and whether an investor should buy it or not. Let’s get started.

What are Penny stocks in India?

Penny stocks are those stocks that trade at a very low market price, generally with a share price less than Rs 10. These stocks have a very low market capitalization and typically under Rs 500 crores.  Further, penny stocks in the Indian stock market have low liquidity and are speculative in nature.

Being smaller than Small-cap companies, these stocks belong to the microcap category. However, you can find a number of penny stocks in India listed on both the Bombay stock exchange (BSE) and the National stock exchange (NSE).

Note: If we look into history, the term Penny Stocks came from US markets.  In the United States, penny stocks used to be those stocks who trade below one dollar ($1) i.e. the stock worth pennies. However, nowadays, even the stocks trading below two to five dollar are even considered penny stocks there.

Here are a few examples of penny stocks in India (Source: Trade Brains Screener):

CompanyIndustryMarket CapPE Ratio TTMCurrent PriceROE 3 YrDebt/Equity
Aditya Spinners Ltd.Textile - Spinning10.03 Cr4.2311Rs 5.9912.110.75
Advance Multitech Ltd.Rubber Products1.66 Cr14.5906Rs 4.086.730.59
Anupam Finserv Ltd.Finance - NBFC8.89 Cr16.5616Rs 8.466.080.58
Ashirwad Capital Ltd.Finance - Investment11.56 Cr24.8069Rs 2.8911.630
Asian Fertilizers Ltd.Fertilizers0.91 Cr1.3112Rs 1.156.790.64
ATV Projects India Ltd.Engineering - Industrial Equipments36.12 Cr5.2401Rs 6.808.660.35
AVI Polymers Ltd.Trading1.98 Cr10.071Rs 4.855.60
Baba Arts Ltd.Film Production, Distribution & Entertainment52.45 Cr19.5554Rs 9.995.290
Balurghat Technologies Ltd.Logistics14.56 Cr22.1951Rs 8.0013.080.88
Basant Agro Tech (India) Ltd.Fertilizers68.15 Cr8.1278Rs 7.526.140.48
Bervin Investment & Leasing Ltd.Finance - Investment4.46 Cr1.56Rs 7.5728.280.83
Beryl Securities Ltd.Finance - NBFC2.60 Cr7.9983Rs 5.365.950
Capital Trade Links Ltd.Finance - NBFC25.82 Cr24.5419Rs 4.797.010.03
Century Extrusions Ltd.Aluminium & Aluminium Products42.64 Cr67.6825Rs 5.338.540.85
CES Ltd.BPO/ITeS29.78 Cr3.0272Rs 8.1812.830.02
Chandni Machines Ltd.Retailing2.01 Cr3.8009Rs 6.2331.450.11
Corporate Courier & Cargo Ltd.Courier Services2.38 Cr16.9714Rs 3.3030.960.01
Cybermate Infotek Ltd.IT - Software14.35 Cr3.1045Rs 1.4515.020.05
Ekam Leasing & Finance Company Ltd.Finance - NBFC2.34 Cr3.083Rs 3.906.350.79
Enterprise International Ltd.Textile2.54 Cr3.3513Rs 8.505.360.13
Gagan Gases Ltd.Industrial Gases & Fuels3.16 Cr35.1439Rs 7.008.010.02
Golkonda Aluminium Extrusions Ltd.Aluminium & Aluminium Products1.60 Cr18.1326Rs 4.2935.490
Gratex Industries Ltd.Paper & Paper Products2.73 Cr29.369Rs 9.005.960.05
GSL Securities Ltd.Finance - NBFC1.43 Cr38.6486Rs 4.4022.080
Haria Exports Ltd.Trading1.28 Cr3.9448Rs 1.116.530
Intellivate Capital Advisors Ltd.Miscellaneous14.41 Cr65.201Rs 4.645.810
Interactive Financial Services Ltd.IT - Software2.72 Cr13.0809Rs 9.038.520
Jai Mata Glass Ltd.Glass1.90 Cr3.8076Rs 0.1910.40
JJ Finance Corporation Ltd.Finance - NBFC1.68 Cr14.1237Rs 5.968.320
Kabsons Industries Ltd.Industrial Gases & Fuels8.40 Cr8.0534Rs 4.8123.20
Krishna Capital And Securities Ltd.Finance - NBFC1.47 Cr6.831Rs 4.656.570
LKP Securities Ltd.Finance - Stock Broking56.93 Cr7.7741Rs 7.7011.630.4
Modex International Securities Ltd.Finance - Stock Broking4.43 Cr7.4295Rs 3.695.150.46
Moongipa Capital Finance Ltd.Finance - NBFC0.81 Cr1.1402Rs 2.659.720.07
NCC Blue Water Products Ltd.Aquaculture3.76 Cr10.7701Rs 4.8530.060
NHC Foods Ltd.Consumer Food9.13 Cr6.4511Rs 7.705.060.94
North Eastern Carrying Corporation Ltd.Logistics49.80 Cr40.7161Rs 9.925.860.83
NR International Ltd.Steel & Iron Products5.34 Cr82.1107Rs 5.006.210
One Global Service Provider Ltd.Textile1.28 Cr4.3351Rs 1.805.580.06
Orient Tradelink Ltd.Film Production, Distribution & Entertainment8.94 Cr85.9276Rs 1.635.830.23
Peeti Securities Ltd.Trading2.72 Cr7.8477Rs 7.2412.510
Pervasive Commodities Ltd.Electric Equipment0.09 Cr18.2822Rs 9.6036.760.93
Pioneer Agro Extracts Ltd.Solvent Extraction3.47 Cr11.5144Rs 8.0023.70
RTCL Ltd.Construction - Real Estate5.90 Cr36.2244Rs 4.92110.06
Sagar Productions Ltd.Finance - Investment31.99 Cr81.4078Rs 7.9713.750.01
Sakuma Exports Ltd.Trading160.67 Cr18.2459Rs 6.8512.740.02
Salem Erode Investments Ltd.Finance - NBFC2.17 Cr9.8499Rs 1.8912.520
Sarthak Industries Ltd.Diversified6.77 Cr1.6676Rs 9.725.030.01
Shailja Commercial Trade Frenzy Ltd.Trading2.05 Cr7.0806Rs 6.3222.180.05
Shyam Century Ferrous Ltd.Ferro & Silica Manganese146.63 Cr20.1365Rs 6.606.670.02
Speedage Commercials Ltd.Trading0.93 Cr2.6374Rs 9.507.230
Sri Krishna Constructions (India) Ltd.Construction - Real Estate6.88 Cr8.5255Rs 6.579.10.24
Sugal & Damani Share Brokers Ltd.Finance - Stock Broking5.43 Cr2.8463Rs 8.6814.940
Super Bakers (India) Ltd.Consumer Food1.94 Cr8.9809Rs 6.426.240
Surana Telecom & Power Ltd.Cable75.48 Cr15.841Rs 5.565.180.35
Surat Textile Mills Ltd.Textile - Manmade Fibres100.13 Cr19.2712Rs 4.518.120
Swasti Vinayaka Art & Heritage Corporation Ltd.Miscellaneous17.60 Cr27.7603Rs 4.4022.070.64
Syncom Formulations (India) Ltd.Pharmaceuticals & Drugs306.80 Cr15.9723Rs 3.938.760.01
Talwalkars Better Value Fitness Ltd.Miscellaneous6.82 Cr2.799Rs 2.207.990.83
Tirupati Sarjan Ltd.Construction - Real Estate27.11 Cr18.6328Rs 8.246.920.66
Umiya Tubes Ltd.Steel & Iron Products8.27 Cr98.3989Rs 8.266.680.25
Uniply Industries Ltd.Wood & Wood Products72.59 Cr3.4686Rs 4.338.040.22
Unjha Formulations Ltd.Pharmaceuticals & Drugs4.05 Cr25.6069Rs 9.0324.650
Viji Finance Ltd.Finance - NBFC6.43 Cr90.6338Rs 0.786.410.36
Vikas Proppant & Granite Ltd.Chemicals179.11 Cr30.6428Rs 3.4811.110.29

PROS of Penny stocks in India

Penny stocks have a high potential of rewarding its shareholder. The returns are quite high if you are able to get a good penny stock. Many penny stocks have turned out to be multi-baggers for their investors.

These stocks are able to make explosive moves. There are a number of penny stocks that have given multiple times returns in just a few months. Moreover, due to the low market price of these stocks, investors are able to buy large quantities of penny stocks.

Generally, penny stocks are not known to many as retail investors do not have information about these stocks, and institutional investors do not invest in these companies because of their low market capitalization. Therefore, if you are able to find one such stock before the market does, then it can turn out to be a great wealth creator for you.

Also read: How To Invest Rs 10,000 In India for High Returns?

CONS of Penny stocks in India

The cons list of penny stocks is too large compared to its pros. Here are a few of the common disadvantages of buying penny stocks:

  1. High Risk: These stocks are quite risky as the percentage of a number of penny stocks outperforming the market is quite less. Many of the penny stocks become bankrupt and go out of business.
  2. These stocks have very low liquidity. Therefore there will be troubles on both ends of transactions i.e. buying and selling. While buying these stocks, you might not be able to find a seller. In case you bought the stock, and the stock price starts falling, then you won’t be able to find a buyer to sell the stock.
  3. There is a large bid-ask spread in these stocks.
  4. Limited information is available to the public about the company.
  5. Price manipulations: There have been a number of cases of price manipulations in penny stocks where the insiders try to inflate the share price. Further, one can easily manipulate the penny stocks by buying large quantities of these stocks.
  6. Sudden delisting and regulatory scrutiny: There are multiple cases where penny stocks have been delisted from the stock exchanges. Further, these stocks are regularly under scrutiny by SEBI.
  7. Prone to scams: There are a number of past scams in penny stocks (Ex- pump and dump).

Related post: Market Capitalization Basics: Large cap, Mid cap & Small cap companies

Who should buy penny stocks?

Penny stocks are suitable for those investors who are ready to take high risks in expectations to get high returns. If you have a low-risk appetite, do not invest in these stocks.

Rules for investing in Penny stocks in India

Here are a few guidelines that can help you to invest in penny stocks.

  1. Look for value, not just the price: Even for penny stocks, you need to look at the value the company is giving. Understand the company’s business, product, services, etc. Investing in penny stock is not buying a lottery ticket.
  2. Study the company’s fundamentals: Look at the company’s financials, management, debt, growth rate, etc
  3. Check the liquidity: Buy stocks that have reasonably high trading volumes so that there is ample liquidity.
  4. Promoter’s share and pledge: Check the promoter’s shareholding patterns and stock pledge if any.
  5. Technical factors: If you know technical analysis, then also check the penny stock’s technicals. Moreover, if you’re purchasing penny stocks just for quick returns, do not ignore looking into factors like momentum, technical indicators like moving averages, RSI, etc.
  6. Invest only a small portion of your investment in penny stocks: As these stocks have a high risk, you should only invest a small amount, less than 10% of your total investment amount in penny stocks.
  7. Monitor continuously: Penny stocks are very volatile. As these stocks are known to make explosive moves, therefore monitor these stocks continuously. If the stocks are performing well, buy more. If they are continuously performing poorly, get rid of it.
  8. Do not diversify: As you are only investing a small proportion of the amount in these stocks, diversifying will make the net investment even smaller. Select only 2 or 3 penny stocks and invest in them.
  9. Be disciplined: Do not invest all in if your penny stocks start performing tremendously good. Similarly, do not quit if one or two of your penny stocks failed to give satisfactory returns.
  10. Do not believe the ‘It cannot go down any further’ myth. If the prices of the stock are falling, try to find the reason behind it.

Conclusion

While there are a number of peoples who have created huge wealth by investing in penny stocks, however for many penny stocks are wealth destroyers. If you are going to invest in penny stocks, do your research carefully and do not speculate about the stock. Moreover, there are high risks involved in these stocks. So, be ready for it.

Finally, here’s a short video to summarize what are penny stocks in India and how to research and analyze them.

 

Also read: How to Invest in Share Market? A Beginner’s guide

That’s all for today on penny stocks. I hope this post was useful to you. If you have any doubts/queries, feel free to comment below. I’ll be glad to help. Happy Investing and Trading. Take care!

Want to Invest in Digital India Stocks Here are the Big companies

Want to Invest in Digital India Stocks? Here are the Big Players!

Introducing Digital India Stocks: One of the greatest wealth creators in the stock market has been technologically-driven digital stocks. The companies working on Digital India (and digital world) segment have been the darlings of the investors because of their tech advancement and future growth scope. 

Today, we take a look at the Digital India Stocks and the top companies that fall into this theme.

What is Digital India?

Digital India is a campaign launched by the Government of India in order to ensure improved online infrastructure by increasing Internet connectivity. The government has put forward plans to connect rural areas with high-speed internet networks. Empowering citizens with access to digital services and information can emerge as one of the biggest drivers of economic growth.

The government has rightly identified this sector in order to bring greater focus to this sector. The initiatives include enhancing digital infrastructure, increasing digital literacy, and providing a sustainable living environment in urban areas through the use of technology, and building smart cities.

How well was the Digital India Initiative?

When the Digital India Week was launched by Prime Minister Narendra Modi in Delhi on 1 July 2015, top CEOs from India and abroad committed themselves towards investing US$3.1 trillion towards this initiative. These investments would be directed towards making smartphones and internet devices at an affordable price in India.

Such initiatives would lead to greater job generation in India and also reduce the cost of products. The program has been favored by multiple countries including the US, Japan, South Korea, the UK, Canada, Australia, Malaysia, Singapore, Uzbekistan, and Vietnam.

After the launch of the initiative, Indian firms got $7.4 billion in the nine months into 2017 in comparison to $4.5 billion in 2016. India is now adding 10 million daily active internet users monthly. This is is the highest rate of addiction to the internet community anywhere in the world. The Ministry of Communications & IT also revealed that Digital India was now a $1-trillion business opportunity.

Digital India Stocks – Top Companies

Below are some of the companies that fall within the Digital India Stocks Theme. The table includes companies name along with the market cap and respective industry.

#COMPANY NameMARKETCAPINDUSTRY
1Infosys Ltd.550977.69 CrIT - Software
2Reliance Industries Ltd.1329422.49 CrTelecom/Refineries
3Zee Entertainment Enterprises Ltd.21352.01 CrTV Broadcasting & Software Production
4Honeywell Automation India Ltd.33003.06 CrConsumer Durables - Electronics
5Mphasis Ltd.29583.92 CrIT - Software
6HCL Technologies Ltd.268992.05 CrIT - Software
7Bharti Airtel Ltd.280361.09 CrTelecommunication - Service Provider
8Tata Consultancy Services Ltd.1160349.92 CrIT - Software
9Sun TV Network Ltd.19386.99 CrTV Broadcasting & Software Production
10Tech Mahindra Ltd.97138.96 CrIT - Software
11Info Edge (India) Ltd.70731.55 CrBPO/ITeS
12Quess Corp Ltd.7746.56 CrMiscellaneous
13Indiamart Intermesh Ltd.20948.42 Cre-Commerce

Important Note: If you want to look into many such thematic stocks like Housing India, Electric Vehicle India Stocks, Infrastructure India, etc, you can go to Trade Brains Portal – BUCKETS. Here, you can find an organized selection of stocks, categorized especially for you.

Closing Thoughts

Digital India Stocks are technologically driven and hence have been one of the biggest saviors in times of the pandemic. The current situation has also led to an increased usage of products from such companies.

This also means a change in our behaviors post the pandemic with regards to acceptance and dependence on such products. Selecting stocks that have the ability to weather the storm provides investors with the opportunity to take part in the growth of these stocks.

Best Performing Largecap Stocks in 2020 - Holding any of these cover

Best Performing Largecap Stocks in 2020 - Holding any of these?

List of Best Performing Largecap Stocks in 2020 in India: The year 2020 been a roller-coaster journey for all the equity investors. At one time during the start of the pandemic, the market saw two lower circuits of 10% within a span of 10 days which even resulted in halting trades for a few minutes on those days.

On 23rd March 2020, the broad market Index Sensex tanked by 10% or nearly 3,000 points to hit 26,924 before trading was stopped. NSE Index Nifty50 similarly fell 842 points, or 9.63%, to 7,903 on that day. However, fast forward almost nine months and today Sensex is hovering at 46,973.54 points while Nifty 50 at 13,749.25.

Moreover, if we look at Sensex, it has given a return of 34.82 percent in the last six months and 13.72% in 2020. These returns are astonishing, seeing the fact that we are still going through the pandemic, vaccines are yet to come in India and the economy has still far to go to recover significantly.

Now, if we look further, many large-cap companies have performed quite well in this period and make wealth for the people struggling in the pandemic. Here is a list of 28 big public companies in India with a market capitalization of over Rs 40,000 Cr, which has given above 30% returns in the last one year.

Best Performing Largecap Stocks in 2020

CompanyIndustryMarket CapPE Ratio TTM1 Yr Returns (%)
Adani Green Energy Ltd.Power Generation/Distribution162000.60 Cr644.4322562.96
Adani Gas Ltd.Trading40511.50 Cr96.7924137.77
Adani Enterprises Ltd.Trading52043.01 Cr206.2743126.68
Divis Laboratories Ltd.Pharmaceuticals & Drugs99532.13 Cr56.6141106.48
Larsen & Toubro Infotech Ltd.IT - Software63292.58 Cr39.3317104.82
Aurobindo Pharma Ltd.Pharmaceuticals & Drugs53261.82 Cr20.020897.69
Tata Consumer Products Ltd.Consumer Food55693.08 Cr98.250192.07
Cadila Healthcare Ltd.Pharmaceuticals & Drugs50127.56 Cr28.492990.36
Info Edge (India) Ltd.BPO/ITeS59410.36 Cr225.003582.82
Dr. Reddys Laboratories Ltd.Pharmaceuticals & Drugs86533.22 Cr35.237781.53
Cipla Ltd.Pharmaceuticals & Drugs67214.01 Cr29.969775.72
Infosys Ltd.IT - Software526634.14 Cr31.629769.57
Biocon Ltd.Pharmaceuticals & Drugs57816.00 Cr146.703966.42
HCL Technologies Ltd.IT - Software249589.35 Cr25.380264.02
Muthoot Finance Ltd.Finance - NBFC47657.26 Cr14.210358.28
Wipro Ltd.IT - Software218440.22 Cr24.665252.7
Torrent Pharmaceuticals Ltd.Pharmaceuticals & Drugs47101.79 Cr48.608750.99
Asian Paints Ltd.Paints254125.07 Cr112.646146.34
Berger Paints India Ltd.Paints70903.90 Cr117.63442.19
Sun Pharmaceutical Industries Ltd.Pharmaceuticals & Drugs141524.77 Cr49.117239.87
Havells India Ltd.Electric Equipment56046.94 Cr73.184639.78
Avenue Supermarts Ltd.Retailing173166.37 Cr183.976839.14
JSW Steel Ltd.Steel & Iron Products88518.61 Cr35.707436.08
Mahindra & Mahindra Ltd.Automobiles - Passenger Cars88428.29 Cr034.55
Tata Steel Ltd.Steel & Iron Products74926.33 Cr15.723833
Reliance Industries Ltd.Refineries1348288.66 Cr47.368232.84
Tata Consultancy Services Ltd.IT - Software1091362.33 Cr37.053132.13
Adani Ports and Special Economic Zone Ltd.Port97178.69 Cr50.052931.6

(Source: Trade Brains Portal)

Disclaimer: The stocks listed above should not be considered as recommendations. Please study the companies carefully or take the help of a financial advisor before investing.

Interestingly, the top three positions are taken by Adani Green Energy(+562.96), Adani Gas (+137.77%), and Adani Enterprises (+126.68%). Pharma stocks like Divi’s Lab, Aurobindo Pharma, Cadila Healthcare, Dr. Reddy’s Lab, and Cipla have also given above 70% returns in this time period. Other blue-chip wealth creator stocks in this list are Infosys, HCL, WIPRO, Asian Paints, TCS, and Reliance.

Anyways, whether these above-mentioned companies will continue their steak in 2021 depends is yet to test. However, time and again, the share market has proved itself to be a place to create wealth, even in the times of global pandemic.

Indian Metal Industry - Best Metal Stocks in India

Indian Metal Industry – Best Metal Stocks in India!

List of Best Metal Stocks in India – Indian Metal Industry: Did you know that the practice of manufacturing practical metals first began in India? Archaeological sites have been found in UP which provides evidence of iron implements all the way back to 1800 BCE. The Metal industry in India already has a significant place in history and today competes to once again achieve the status in global markets as well. Today we examine the Indian metal industry and the top companies that play an important role in the industry.

Post-Independence Indian leaders realized that in order to achieve economic growth one of the sectors they would have to focus on would be the metal industry. Historically too, the metal industry has had a dominant role so much so that it is now widely regarded as an indicator of economic progress. In Order to achieve this goal, it would be necessary to develop the primary(raw material), secondary(manufacturing), and tertiary sector(services sector) simultaneously as metals( primarily steel) was the common link between all three sectors.

Over the years this industry has contributed immensely to the country’s growth. Today India produces 87 minerals, which includes 4 fuel, 10 metallic, 47 non-metallic, 3 atomic, and 23 minor minerals.

Indian Metal Industry

India has several advantages over global players in this industry. The first being its strategic location. This puts it right in the middle of fast-developing Asian markets. In addition to this, the local demand is driven by growth initiatives also provides a boost to the industry. These initiatives include expansion of railway networks, the Housing for all by 2022 scheme (20 million houses), the developing shipbuilding industry, the defense sector being opened up to private players, growth in the automobile sector Development of 100 Smart Cities, Power For All, etc. All of these rely on metals hence mandating the metal industry’s growth along with theirs.

Let us now take a look at the different metal industries and the respective top companies in these industries. Here, we’ll cover the best metal stocks in India. Let’s get started.

A) Steel Industry

In 2019 India replaced Japan to become the world’s second-largest crude steel producer at 111.2 MT. The Government realizing the importance and potential of the industry takes special consideration in assisting the improvement of its performance. Currently, the steel industry contributes slightly more than 2% of the country’s GDP. This however accounts for its direct contribution. Indirectly its contribution is much higher. According to the World Steel Association for every two jobs created in the steel industry, 13 more jobs are created across the supply chain. The Ministry of Steel aims to increase the steel production capacity to 300 MT by 2030-31, indicating the opportunities in the sector.

Following are the three best metal stocks in India leading in the steel industry. Together these players account for around 50% of the capacity of the steel industry.

1. Tata Steel

Tata steel best metal stock in IndiaTata Steel is not only Indias largest steel company but also makes it in the top 10 globally with a capacity of 34 MnTPA. It was established in 1907 and was Asia’s first integrated private steel company. It also operates in Europe, which accounts for 12.1 MnTPA of its capacity. The acquisition of Bhushan Steel Limited in the year 18-19 added to the size of the company. 

Tata Steel has manufacturing units in Jamshedpur, Jharkhand, and Kalinganagar, Odisha. As of 2019 the company had revenues of US$22 billion.

2. JSW Steel Ltd.

JSW Steel - Metal stocks in IndiaJSW Steel is part of the JSW Group and is the second-largest steel company in India. The company began with a single facility in 1982 and today has grown to have a capacity of 18 MnTPA. Its plants are present in the states of  Karnataka, Tamil Nadu, and Maharashtra. The company further plans to expand its capacity to 40 MnTPA. It is also India’s leading manufacturer and exporter of coated steel with a capacity of 1.8 MTPA. 

JSW Steel also has an international presence with plates and pipes plant, and mining facilities in the United States, Chile, and Mozambique. As of 2019, the company had revenues of US$12 billion.

3. SAIL

SAIL - Best metal stocks in India

Steel Authority of India Limited is a Public Sector Enterprises and was formed in 1974 as part of the government’s efforts to promote the country’s economic growth. It is the 20th largest steel producer in the world and the 3rd largest in India. SAIL produces iron and steel at 5 integrated steel plants at Bhilai, Rourkela, Durgapur, Bokaro, and Burnpur(Asansol) and 3 special steel plants at Salem, Durgapur, and Bhadravathi. As of 2019 the company had revenues of US$9.5 billion.

ALSO READ

List of Top Conglomerates in India | Tata, Birla & More!

B) Copper Industry

Unlike in Steel  India falls behind in the Copper Industry. The growth in this sector is mainly driven by China. Although India exports copper there is still a significant portion of copper imported into the country. The major challenges that players face in this industry are due to outdated technology, improper infrastructure, high setup cost, high funding cost, and lack of skilled professionals. The period 2011-12 to 2016-17 has seen imports tripling at a CAGR of 15.4%. Following are currently the best metal stocks in India in the Copper Industry.

1. Hindustan Copper Limited (HCL)

Hindcopper best metal stocksSteel Authority of India Limited is a Public Sector Enterprises and was formed in 1973. HCL is the only Indian Copper producer that engages in a wide spectrum of activities ranging from Mining, Beneficiation, Smelting, Refining, and Continuous Cast Rod manufacturer.  It is the first Indian Copper Producer to be accredited with ISO 9002 certification for Continuous Cast Rod Manufacturer. Its mines and plants are spread across five operating Units, one each in the States of Rajasthan, Madhya Pradesh, Jharkhand, Maharashtra, and Gujarat.

2. Bhagyanagar India Ltd (BIL)

2. Bhagyanagar India Ltd (BIL)Bhagyanagar India Ltd.(BIL) was founded in 1985 and is the second largest of the companies producing copper products in India. The Company deals in Copper products such as Copper Rod, Strips, Pipes, Busbars, Sheets among others. Over the years the organization has diversified into Telecom products, Solar Products, and Real Estate. The Company has been run by three generations of the Surana family and is Headquartered in Hyderabad.

3. Arcotech Limited

3. Arcotech Limited Copper stocks in IndiaThe company was initially incorporated in 1981 with the name Shri Krishna Strips Ltd before changing it to Arcotech Ltd. It manufactures Copper as well as copper alloys products and aluminum products like Plates/Bars sheets strips foils and rods. It was able to establish itself as one of the major players in the industry Industry mainly by creating a niche in producing micro-thin foils up to 0.035 mm. Apart from copper the company also produces Phosphor Bronze, Nickel Silver, Nickel Brass, Cupro Nickel, Aluminium Bronze.

Indian Metal Industry Key players 2020 instagram

C) Zinc Industry

Zinc is the fourth most widely used metal globally after steel, Aluminium, and Copper. Just like other metals this industry too is led by China. China accounts for a 33.8% share of the total world production. The Demand for Zinc in India is based on the steel market. This is because Zinc is used in galvanizing and coatings of iron and steel to protect it from corrosion. 70% of the total demand for Zinc is dependent on Steel.  Following are currently the top players in the Industry.

1. Hindustan Zinc Ltd

Hindustan Zinc best metal stocks in indiaHindustan Zinc is India’s largest and world’s second-largest zinc-lead miner. The company was incorporated as Metal Corporation of India in 1966 as a Public sector undertaking. Today the company is a subsidiary of Vedanta Limited which owns a 64.9% stake in the Company while the Government of India holds a 29.5% minority stake. The company has a reserve base of 114.7 million MT with an average zinc-lead grade of 8.7% and mineral resources of 288 million MT. They have a mine life of over 25 years. The company currently holds a 78% market share in India’s primary zinc industry.

2. Mewat Zinc Ltd

Mewat Zinc Ltd best metal stocks in IndiaMewat Zinc is a Public Sector Enterprises and was formed in 1991. It produces zinc metal and related products and conducts business out of India. The company has been promoted by Industrialists and Technocrats.

3. Sunrise Zinc Limited

Sunrise Zinc Limited is an unlisted public company and was incorporated in 1993. It is located in South Goa, Goa. The proposed activities of the company are to manufacture Electrolyte Zinc, Copper Sulphate, and GOB Zinc.

D) Aluminium Industry

In comparison to other non-ferrous metals, Aluminium is the fastest growing metal. Its distinct properties of having higher strength to weight ratio, resistance to corrosion, formability, dampness make it highly valuable. Its demand has increased primarily due to its usefulness in the automobile industry. India is improving its stance in the sector as during 2011-12 to 2016-17 transformed India from being a net importer to a net exporter of Aluminium with a CAGR of 30%. Following are the best metal stocks in India in the Aluminium industry.

1. Hindalco Industries

hindalco best metal stocks in IndiaHindalco Industries Limited an Indian aluminum manufacturing company. It is a subsidiary of the Aditya Birla Group. It is also one of the most profitable of all aluminum manufacturing companies in India.  Hindalco is one of the world’s largest aluminum rolling companies and one of the biggest producers of primary aluminum in Asia.

The company has plants located in Odisha, West Bengal, Nagpur in Maharashtra, Renukoot in Uttar Pradesh, and Taloja near Mumbai in Maharashtra. Its subsidiary company – Hindalco-Almex Aerospace Limited manufactures high-strength aluminum alloys for applications in the aerospace, sporting goods, and surface transport industries. As of 2019 the company had a revenue of US$18 billion.

2. NALCO

NALCO India

National Aluminium Company Limited, is a Public Sector Undertaking and was incorporated in 1981. The company is managed by the Ministry of Mines. The company is one of the largest integrated Bauxite-Alumina-Aluminium-Power Complex in the country encompassing bauxite mining, alumina refining, aluminum smelting and casting, power generation, rail, and port operations. As of 2019 the company had a revenue of US$1.2 billion.

3. BALCO

Bharat Aluminium Co. Ltd. was a  Public Sector Undertaking and was incorporated in the year 1965. In 2001 the company was taken over by Vedanta Resources. The company was the first to produce alloy rods for conductors used in the power transmission industry, the first to roll material for Aerospace in the country, and the first to set up the widest Hot Rolling Mill in India.

ALSO READ

Indian Electricity & Power Sector – Key Companies in 2020!

Closing Thoughts

Today, we covered the Indian metal industry and the best metal stocks in India. In the last few years, India’s domestic metal industry has suffered from a slump one of the causes being that of the trade wars impacting the industry. Most recently the pandemic brought the industry to a halt. This however is temporary and the growth is expected to pick up as soon as India begins focussing on its infrastructure developmental goals.

Unfortunately, the industry being capital intensive send every domestic player in losses in times of economic downturn which reduces demand for these metals. This had made many credit agencies skeptical of lending to the industry. Sound support from the government and a credit boost would go a long way in bringing players back on track

List of Indian Companies with Monopoly in their industry

10 Indian Companies with Monopoly in Their Industry!

List of Indian Companies with Monopoly in their Industry: How many Indian companies can you name that are monopolies? Today we identify one of Warren Buffets’ favorite categories i.e. monopolies, but in the Indian markets. Monopoly refers to the category of companies who due to their major competitive advantage are market leaders in their industry. These companies are very difficult to compete with and maintain the highest market share for their products and services.

In investing however the stocks of these companies are known as MOAT stocks. A Moat is a hole that used to surround Medieval castles. This was done as a defense measure in order to make it harder for invaders to attack the castle. The wider and deeper is the moat, the more protected is the castle is. In the business world, these Moats are either barriers to entry like huge capital, government restrictions, or business advantage that a company has made it hard to compete with them.

moat investingToday, we take a look at the public Indian companies with monopoly in their industry. There are market leaders in their industry with zero or very less competition. Let’s get started.

Top 10 Indian Companies with Monopoly

Following are the list of monopolies in the Indian markets i.e. the companies that enjoy the status of being a monopoly: (Company – Market Share)

1. IRCTC – 100%

IRCTC stock - Indian Companies with Monopoly

IRCTC is a state-owned entity and the only player in the Indian markets that operate in the Industry. This makes it a monopoly as consumers have no other alternative. The company was founded in the year 1845. It is one of the largest railways in the world and is one of the world’s largest employers. Rail networks are generally considered as ‘ Natural Monopolies’. This is because only one train can use the rack at a given time.

However, countries like the UK have bought in private players by allowing them to bid for rail lines. Earlier this year India too announced that it will be opening the sector for players.

2. HAL – 100%

HAL - Indian Companies with Monopoly in their Industry

The Hindustan Aeronautics India Limited represents the Indian aviation industry and plays a very important role in the Indian defense sector. The company a set up in 1940 by Walchand Hirachand and the Government of Mysore, with the aim of manufacturing aircraft in India. Today the company is state-owned and is associated with designing, fabricating, and assembling aircraft, jet engines, helicopters, and their spare parts. 

3. Nestle – Cerelac – 96.5%

Nestle - Cerelac - 96.5% monopolyCerelac is the brand of instant cereal made by Nestle for infants 6 months and older as a supplement for breast milk. Nestle is one of the worlds leading nutrition, health, and wellness company which was set up in 1866 in Switzerland. It has spent more than a century in the Indian markets over the years has become an undisputed market leader in the baby food segment. It has an undisputed market share of 96.5% despite functioning in an open to all industry.

4. Coal India – 82%

coal india monopolyCoal India Limited is a coal mining and refining company. It is also the world’s largest coal-producing company in the world. It is owned by the Union government of India and is managed by the Ministry of Coal. The company contributes up to  82% of the total coal production in India. It was only this year that the government announced that the coal sector would now be opening up for commercial mining possibly ending its monopoly in the future.

5. Hindustan zinc – 78%

Hindustan zinc - 78%Hindustan Zinc Ltd. is the world’s second-largest zinc-lead miner and holds a 78% market share in India’s primary zinc industry. The company was incorporated as Metal Corporation of India in 1966 as a Public sector undertaking. Today the company is a subsidiary of Vedanta Limited which owns a 64.9% stake in the Company while the Government of India holds a 29.5% minority stake.

ALSO READ

What is an Economic MOAT? And Why it’s Worth Investigating?

6. ITC- 77%

ITC- 77%Although the company has diversified into a conglomerate in the last century. Despite this, its cigarette business still holds 77% a strong position in the Indian markets. This can be attributed to the expertise the company has developed in the field and a willingness to develop products to match the evolving taste of different types of consumers.

ITC’s wide range of brands includes Insignia, India Kings, Classic, Gold Flake, American Club, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal. Apart from a market experience, another advantage that the brand has is its supply chain and distribution network which spans across the country.

7. Marico – Oil Products – 73%

Marico - Oil Products - 73%Marico is one of the well-known FMCG companies in India but the majority of its success lies in its two brands ‘Saffola’ and ‘Parachute’. The company has come a long way in the segment despite being around for only 3 decades. Safola which competes in the premium refined edible oil segment has maintained its market leadership with a share of 73%. ‘Parachute’ on the other hand holds a market share of 59%. These also form up to 90% of their income.

8. Pidilite – 70%

Pidilite - 70%Pidilite’s product range includes adhesives and sealants (Fevicol and M-seal), construction and paint chemicals (Dr. Fixit), automotive chemicals, industrial adhesives, and industrial & textile resins. It is the leader in the adhesive and industrial chemical market with a market share of 70%.

9. CONCOR – 68.52%

CONCOR - 68.52%Container Corporation of India Limited (CONCOR) is a Public Sector Undertaking managed by the Indian Ministry of Railways. The company was set up in 1966 with the aim of containerizing cargo transport in the country. Concor’s core businesses include that of cargo carrier; terminal operator, warehouse operator & MMLP operation. They hold a market share in domestic business of 68.52% in 2019-20.

10. BHEL   

BHEL

BHEL is India’s largest engineering and manufacturing enterprise in the energy and infrastructure sectors and also a leading power equipment manufacturer globally. Its services and products range from power-thermal, hydro, gas. Nuclear and solar PV, transmission, transportation, defense & aerospace, oil & gas, and water. It also holds the single largest market share in the emission control equipment business in India

ALSO READ

Pat Dorsey’s Four Moats for Picking Quality Companies

Closing Thoughts

In this post, we discussed the list of Indian Companies with Monopoly in their Industry. For a value investor, a monopoly or big Moat stock is similar to a gold mine. This is because if one can find a suitable Moat stock to invest in they provide significant returns in the long turn. But investors must watch out as these stocks just like other Blue Chip companies are generally overvalued and can lead to lower returns or losses. 

List of Top Conglomerates in India cover

List of Top Conglomerates in India | Tata, Birla & More!

Top Conglomerates in India: It has been almost three decades since the Indian economy underwent liberalization and privatization and opened up to the world. Since then we have evolved into a $3 trillion economy in 2019 and have set sights on becoming a $5 trillion economy by 2025.

A portion of the achievements can be attributed to private players that have established themselves in multiple industries to form conglomerates. Today, we take a look at the top conglomerates in India.

innovation and growth of india

What is a Conglomerate?

A conglomerate in simple words is a multi-industry company. A conglomerate includes one group that overlooks multiple business entities in entirely different industries.

One may wonder why companies would even want to grow into multi industries instead of maintaining a profitable lead by focussing on one industry. It is because such companies put greater emphasis on growth and they realize the impacts they can have due to their capital potentials.

It is interesting to note that Amazon one of the top global conglomerates has never been profitable because the company makes long-term growth a priority over profits. This is also because of other means of financing have enabled firms to remain afloat and grow into multiple industries.

The success of conglomerates can also be attributed to brand recognition among consumers. The success of a company in one industry makes consumers more willing to experiment with their products in other industries. Another factor that plays the most important role in the success of these conglomerates is the men leading them. These are those that even we look up to. 

List of 7 Top Conglomerates in India

1. Reliance Industries Ltd.

reliance industries

This Indian conglomerate company was founded as Reliance commercial corp. 60 years ago by Dhirubhai Ambani. The company was partitioned after Dhirubhai Ambani’s death between his two sons. Hence came Reliance Industries headed by Mukesh Ambani. The company owns oil, petrochemical, textile, natural resource, banking, and telecommunication enterprises throughout India.

RIL is currently one of the most profitable and largest publicly-traded companies in India. The company has an MCAP of over Rs. 15 lac crore. RIL is currently the only Indian company ranking in the top 100 in the Forbes 2000 [2020] list. The company is ranked 71st in the world according to the list.

How reliance industries makes money 2020

2. Tata Group

tata group conglomerates

Tata Group is an Indian conglomerate giant founded in 1868 by Jamsetji Tata. The conglomerate is owned by Tata and Sons and is currently run by Natarajan Chandrasekaran.

However, it is Ratan Tata’s legacy of 21-years tenure that is admired by many.  During his tenure revenues grew over 40 times and profit over 50 times. Under him Tata acquired Tetley and Tata Motors acquired Jaguar Land Rover. Tata group has companies present in automobile, airline, chemical, defense, FMCG, electric utility, Finance, home appliance, hospitals, IT, retail, eCommerce, steel, industries, etc.

Its biggest companies include TCS [over 9 lac crore] and ITC [over 2 lac crore]. Both the companies made it to the Forbes 2000 list ranked 374 and 806 respectively. ITC is currently India’s largest employer with over 4.4 lakh employees.

TATA Group companies listed in India

3. Aditya Birla Group

Birlas are one of the most popular names in the business world in India and Aditya Birla Group is one of the biggest Conglomerates in India. The group was founded by Seth Shiv Narayan Birla in 1857 and currently headed by Kumar Mangalam Birla as its chairman. The group operates in Branded Apparels, Fashion, Textiles, Cement, Carbon Black, Metals, Chemicals, Telecom, Financial Services, and more.

Aditya Birla Group Companies

4. Mahindra Group

Anand mahindra

Mahindra was founded in 1945 as a steel trading company and is currently one of the largest Indian conglomerates. Its companies are present in aerospace, agribusiness, automobile, construction equipment, defense, energy, finance, insurance, industrial equipment, IT  leisure and hospitality, logistics, real estate, retail, and two-wheelers.

One of the most notable chairpersons from Mahindra is Anand Mahindra. One of its most successful investments includes Kotak Mahindra Bank Ltd.

5. Bajaj Group

bajaj group

The Bajaj Group conglomerate company was founded in 1926. The company is currently headed by Rahul Bajaj. Bajaj initially expanded into the scooter and three-wheeler manufacturing.

Today the company has its presence in the finance, electrical, iron, steel, home appliance sector, etc. Its most notable company is Bajaj Automobile which is ranked as the world’s fourth-largest 2&3 wheeler manufacturer.

Bajaj Group Companies Listed in Indian share market 

6. Adani Group

adani group

Adani was founded in 1988 as a commodity trading firm by its current chairman Gautam Adani. The company began trading coal in 1999 and began coal trading in 1999 and ventured into the market for edible oil under the Fortune brand.

The group currently holds a portfolio of companies which include the energy, resources, logistics, agribusiness, real estate, financial services, defense, and aerospace sectors. Today the group holds one of the largest electric companies in India i.e. Adani Green and is India’s largest port developer and operator.

Adani Group Listed Companies in India 2020

7. L & T Group

L&T Group

Larsen & Toubro Limited was founded in 1938 by two Danish engineers taking refuge in India. The two engineers, Henning Holck-Larsen and Søren Kristian Toubro escaped Germany’s invasion of Denmark during WW2.

The company has business interests in basic and heavy engineering, construction, realty, manufacturing of capital goods, information technology, and financial services.

Also read:

Closing Thoughts

Today, in this article, we covered seven of the top conglomerates in India.

Although there are multiple advantages that the company enjoys by extending into other industries, not all companies opt for it. Take Unilever for eg. The company in its pursuit to gain a larger margin branched itself into every activity that might be necessary for its business. Unilever in its pursuit to gain a larger margin branched itself into other activities that might be necessary for doing its business. The company owned plantations, oil mills, their own shipping line, logistics business, and even ran the stores themselves.

They, however, realized that they were better off only focussing on their core business i.e. creating FMCG products. This led to them selling off their supermarkets, chemical business, and cosmetics and investing in building their brands. Some other noteworthy Indian conglomerates are the Bharti Group, Godrej Group, and Wipro.

Top 10 Companies in India by Market Capitalization list

Top 10 Companies in India by Market Capitalization

List of the Top 10 Companies in India by Market Capitalization (Updated Oct’20): As per the International Monetary Fund (IMF), India is the seventh-largest economy in the world in terms of nominal Gross Domestic Product (GDP),  which is valued to be worth US$ 2.308 trillion. This is mainly due to business various Indian companies have been doing in India and overseas. 

Every company operating in India works extremely hard to get better in terms of the quality and customer satisfaction that they provide through its products or services. An organization is generally evaluated on different parameters such as assets, profits, sales, market value, share price, etc. and is ranked accordingly. However, when we talk about the size of a company, one of the biggest factors to look at is its market capitalization.

In this post, we are going to discuss the ten biggest public companies in India based on their latest market capitalization.

What is market capitalization?

Market capitalization is the aggregate valuation of the company based on its current share price and the total number of outstanding stocks. It is calculated by

Market capitalization = (Current market price of 1 share)*(total number of outstanding shares)

It helps to classify the companies in different types like large cap, mid cap, and small cap companies. The companies with a market cap of Rs 29,000 crore or more are large-cap stocks. Company stocks with a market cap between Rs 8,500 crore and 29,000 crores are mid-cap stocks and those less than Rs 8,500 crore market cap are small-cap stocks. (Related post: Basics of Market Capitalization in Indian Stock Market.)

Let’s understand with an example 

Just by looking at the share price, you cannot judge the size of a company. For example, here are the share price of two companies from the automobile sector.

  1. Maruti Suzuki – Rs 7,059
  2. MRF – Rs 59,798

Which company is bigger?

If you just look at the share prices, you might think that MRF’s share price is quite large compared to Maruti Suzuki, and hence, it may be bigger.

However, the total number of outstanding shares of Maruti Suzuki is much large compared to MRF. Maruti Suzuki has around 30.2 Crore shares while MRF has 0.42 crores shares. Therefore, the market capitalization of Maruti Suzuki is Rs 213,785 Crores while the market capitalization of MRF is Rs 25,115 Crores. Therefore, Maruti Suzuki is a bigger company compared to MRF.

Top 10 Companies in India by Market Capitalization

Here is the list of the top 10 companies in India by market capitalization:

1. Reliance Industries

Reliance Industries Limited

Reliance Industries Limited (RIL) is an Indian multinational company headquartered in Mumbai, currently headed by Mukesh Ambani. The company was co-founded by Dhirubhai Ambani and Champaklal Damani in the 1960s as Reliance Commercial Corporation.

Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. Reliance is one of the most profitable companies in India. The market capitalization value of RIL is Rs.14,72,850 Crores with a current price of Rs.2,233.

2. Tata Consultancy Services (TCS)

TCS building

Tata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT) service and consulting company headquartered in Mumbai, Maharashtra, India. It is a subsidiary of Tata Group and operates in 149 locations across 46 countries.

TCS is the second-largest Indian company by market capitalization. TCS is now placed among the most valuable IT services brands worldwide. The market capitalization value of TCS is Rs. 10,55,527 Crores with a current price of Rs. 2,812.

3. HDFC Bank

HDFC Bank

HDFC Bank is an Indian banking and financial services company that was incorporated in 1994, with its registered office in Mumbai, India. Its first corporate office at Sandoz House, Worli was inaugurated by the then Union Finance Minister, Manmohan Singh.

As of  June 2019, it had a base of 1,04,154 permanent employees with 5,130 branches across 2,764 cities. It is India’s largest private sector lender by assets and market capitalization. It has a market capitalization value of Rs. 6,78,909 Crores with a current price of Rs. 1,233.

4. Hindustan Unilever (HUL)

Hindustan Unilever
Hindustan Unilever Limited (HUL) was established in 1933. It is a British-Dutch manufacturing company headquartered in Mumbai, India. Its products include foods, beverages, cleaning agents, personal care products, water purifiers, and consumer goods.

As of 2020 Hindustan Unilever portfolio had 35 product brands in 20 categories with 18,000 employees and sales of Rs. 39,783 crores in 2019-20. The market capitalization value of Hindustan Unilever is Rs 5,02,722 Crores with a current price of Rs 2,139.65.

5. Infosys

Infosys building

Infosys Limited is an Indian multinational corporation that provides business consulting, information technology and outsourcing services.

It is the second-largest Indian IT company after Tata Consultancy Services with its headquarters in Bangalore, Karnataka, India. The market capitalization value of Infosys is Rs. 47,1431.68 Crores with a current price of Rs. 1,106.8.

6. H D F C

HDFC Limited

Housing Development Finance Corporation Limited (HDFC) is an Indian financial services company founded in 1977 as the first specialized mortgage company in India based in Mumbai. It is a major provider of finance for housing in India.

HDFC also has a presence in banking, life and general insurance, asset management, venture capital, realty, education, deposits, and education loans. The market capitalization value of HDFC is Rs. 3,51,555.95 Crores with a current price of Rs. 1,957.65.

7. ICICI Bank

ICICI bank building

It is an Indian multinational banking and financial services company headquartered in Mumbai and its registered office in Vadodara, Gujarat. It offers a wide range of banking products and financial services in the areas of investment banking, life, non-life insurance, venture capital, and asset management.

ICICI Bank has 4867 branches and 14367 ATMs across India and has a presence in 17 countries including India as of March 31, 2018. The market capitalization value of ICICI bank is Rs. 2,76,902.79 crores with a current price of Rs. 401.5.

8. Kotak Mahindra Bank

Kotak Mahindra Bank

Kotak Mahindra Bank is an Indian private sector bank headquartered in Mumbai, India. Established in 1985  by Uday Kotak.

In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the group’s flagship company, received a banking license from the RBI. It offers banking products and financial services in the areas of personal finance, investment banking, general insurance, life insurance, and wealth management. It is the thrid largest Indian private sector bank by market capitalization value of Rs. 2,61,250.38 crores with a current price of Rs. 1,319.85.

9. HCL Technologies

HCL technologies company

HCL Technologies Limited is an Indian information technology (IT) services and consulting company. This firm is primarily engaged in providing a range of software services business process outsourcing and infrastructure services. It is a subsidiary of HCL Enterprise. The company has offices in 44 countries and 147,123 employees.

The current market capitalization value of HCL Technologies is Rs. 2,32,221.89 crores with the latest share price of Rs. 855.75.

10. Bharti Airtel

bharti-airtel-company

Bharti Airtel Limited (AKA Airtel) is an Indian global telecommunications services company. It offers an integrated suite of telecom solutions to its enterprise customers in addition to providing long-distance connectivity both nationally and internationally. The company generated a net sales of Rs 87,539 Cr in the financial year 2019-20.

Market capitalization value of Bharti Airtel is Rs. 2,31,970.3 crores with a current price of Rs. 425.2.

Also Read :

Summary: Top 10 Companies in India by Market-cap

S.No.Company NameCurrent PriceMarketCap (Rs.Cr)
1Reliance Industries2233.451472850.02
2TCS2812.951055527.06
3HDFC Bank1233.55678909.43
4Hind. Unilever2139.65502722.8
5Infosys1106.8471431.68
6H D F C1957.65351555.95
7ICICI Bank401.5276902.79
8Kotak Mah. Bank1319.85261250.38
9HCL Technologies855.75232221.89
10Bharti Airtel425.2231970.3
11Wipro374213739.74
12Maruti Suzuki7062.4213340.98
13ITC167.85206540.04
14Bajaj Finance3317.9199932.45
15Asian Paints2050.6196693.1

Disclaimer: This data is updated in October 2020, 2019. As the stock price changes in the future, market capitalization will also change. Hence, the list of top 10 companies in India by market capitalization can also change in the future.

Also read: How to Invest in Share Market? A Beginner’s guide!

That’s all for this post on the top 10 companies in India by Market Capitalization. I hope it was useful for you. Take care and Happy Investing.

#12 Companies with Highest Share Price in India (Updated 2020))

#12 Companies with Highest Share Price in India (Updated)

List of Companies with highest share price in India (Updated- October 2020): The majority of shares in India trade at the share price below Rs 1,000 per share on Indian stock exchanges. Howere, there are a few stocks that trade at a price in the mutiples of thousands of rupees. Although, share price of a company has nothing to do with the companies valuation and even a company with a share price of Rs 2,000 can be undervalued compared to it’s peers. Anyways, for the small retail investors, it might be a little difficult to enter those stocks which trade at a very high share prices.

In this article, we are going to discuss the most expensive shares in India i.e. the companies with the highest share price in India. Here, we’ll look at 12 of the costliest shares in India based on the current share price at which they are trading in the market.

Note: Please study the companies carefully if you want to invest in any of the stocks mentioned in the list here. A high stock price doesn’t guarantee a fundamentally strong company or a good investment. And vice versa. Let’s get started.

#12 Companies with Highest Share Price in India

1. MRF (Rs 60,269)

mrf-tyres Companies with Highest Share Price in India

Market Capitalisation = Rs 25,554 Cr

Madras Rubber Factory (MRF) is a Tyre manufacturer that produces a wide range of tyres. It specializes in Car & bike tyres, trucks/buses tires etc.

 Currently, MRF has the highest share price in India among all the listed companies on BSE/NSE. The all-time high share price of MRF is Rs 81,426. The stock is currently trading at a standalone PE of 70.

MRF has never split its share and has a face value of Rs 1o. Noticeably, this company was trading at a price of Rs 10,000, in November 2012.

Also read: Why Do Companies Like MRF Don’t Split the Stock?

2. Honeywell Automation (Rs 32,198)

honeywell

Market Capitalisation = Rs 28,463 Cr

Honeywell Automation India Ltd, a part of Honeywell group, USA and is a leader in providing integrated automation and software solutions. It has a wide product portfolio in environmental and combustion controls, and sensing and control, etc. This stock has given a return of over +235% in the last 5 years. It is currently trading at a PE of 60.03.

3. Page Industries (Rs 20,627)

page industries

Market Capitalisation = Rs 23,001 Cr

Page Industries is an Indian manufacturer and retailer of innerwear, loungewear and socks. One of the fpopular brand under Page Industries is Jockey (Underwear and inner wears company). .This stock has turned out to be a multi-bagger stock in the last couple of years and has given a return of over +2,000% in the last ten years.

Page industries is currently trading at a PE of 119.05.

4. Shree Cements (Rs 20,296)

shree cements

Market Capitalisation = Rs 73,272 Cr

Shree Cement is an Indian cement manufacturer headquartered in Kolkata. This Indian cement manufacturer company was founded in Beawar, Ajmer district, Rajasthan, in 1979. Shree cement is the biggest cement maker in northern India and also produces and sells power under the name Shree Power and Shree Mega Power. 
Shree cements is currently trading at a PE of 49.08.

5. 3M India (Rs 18,795)

3m india

Market Capitalisation = Rs 21,182 Cr

3M India Ltd is the subsidiary listed company of 3M Company USA in India. 3M Company USA holds 75% equity stake in the company. It has a diversified portfolio of products in dental cement, health care, cleaning, etc. This stock is currently trading at a PE of 117.77.

Also read: How to Invest in Share Market? A Beginner’s guide!

6. Abbott India (Rs 15,975)

abbott india share

Market Capitalisation = Rs 33,947 Cr

Headquartered in Mumbai, Abbott India Limited, a publicly listed company and a subsidiary of Abbott Laboratories, takes pride in offering high-quality trusted medicines in multiple therapeutic categories such as women’s health, gastroenterology, cardiology, metabolic disorders, and primary care. It is currently trading at a PE of 51.72. This stock has given a return of over 179% in the last 5 years.

7. Nestle India (Rs 15,851)

Nestle Products

Market Capitalisation = Rs 153,377 Cr

Nestle India is in the food processing industry with a wide variety of products like Maggi, Kit-Kat, Nescafe, Every day, etc.

 It is the Indian subsidiary of Nestlé which is a Swiss multinational company.This stock is currently trading at a PE of 73.59.

8. Bosch (Rs 13,291)

bosch

Market Capitalisation = Rs 39,202 Cr

Bosch ranks eighth in the list of companies with highest share price in India. It is a part of the German multinational company Robert Bosch (or just Bosch), headquartered in Germany. Bosch belongs to the automobile ancillaries industry and currently trading at a PE of 78.23 (52-week high- Rs 17,273).

9. Tasty Bite Eatables (Rs 10,598)

tasty bytes

Market Capitalisation = Rs 2,592 Cr

This company operates in the food processing industry with products like tasty bite rice, noodles, entrees, etc. The Company offers a range of ready-to-serve (RTS) ethnic food products under the brand name Tasty Bite and Frozen Formed Products (FFP). This stock is currently trading at a PE of 78.62.

10. Bombay Oxygen (Rs 10,350)

Market Capitalisation = Rs 155 Cr

This is one of the lesser-known companies on the list of companies with highest share price in India and a smallcap company by marketcap. Incorporated in 1960, Bombay Oxygen is an Industrial gases company. The Company’s name has been changed to BOMBAY OXYGEN INVESTMENTS LIMITED w.e.f 03 October, 2018.

Also read: How To Invest Rs 10,000 In India for High Returns?

11. Procter & Gamble (Rs 9,872)

procter and gamble

Market Capitalisation = Rs 32,598 Cr

P & G is in the personal care industry with products in hygiene and health care. The Company is involved in manufacturing, trading and marketing of health and hygiene products. The Company’s brands include Ambi Pur, Ariel, Duracell, Gillette, Head & Shoulders, Olay, Oral-B, Pampers, Pantene, Tide, Vicks, Wella and Whisper. This stock is currently trading at a PE of 74.

12. Bharat Rasayan (Rs 9,176)

Bharat Rasayan Logo

Market Capitalisation = Rs 3,900 Cr

Bharat Rasayan Limited is a smallcap company based in India and engaged in manufacturing of pesticides-technical, formulations and its intermediates. The Company primarily offers Metaphenoxy Benzaldehyde. The Company’s products are Insecticides, which include Acetamiprid, Bifenthrin, Chlorpyrifos, Cypermethrin etc.

This stock is currently trading at a share price of PE of 24.

Also read: 8 Best Discount Brokers in India – Stockbrokers List 2019

Summary

Here is the list of Companies with Highest Share Price in India along with a few other popular stocks added:

S.No.Company NameShare Price (Rs)MarketCap (Rs Cr)Current PE
1MRF60269.9525554.4621.98
2Honeywell Auto32198.4528463.4360.03
3Page Industries20627.2522999.38119.17
4Shree Cement20296.9573232.9149.08
53M India18795.821182.87111.77
6Abbott India15975.3533947.6251.72
7Nestle India15876.85153077.7973.59
8Bosch13291.7539202.2178.23
9Tasty Bite Eat.10598.152719.4978.62
10Bombay Oxygen10350.05155.25---
11P & G Hygiene9872.2532046.0574
12Bharat Rasayan9176.83900.1424.07
13Sanofi India8748.420147.5739.07
14Dixon Technolog.8719.710088.82102.4
15Yamuna Syndicate8644265.693.5
16Polson8028.896.3519.39
17Maruti Suzuki6892.4208205.6251.63

Disclaimer: The list of 12 Companies with Highest Share Price in India is till date October 2020. The stock market is dynamic and the stock prices will change in the future, which may change the list or the order of the companies listed here.

That’s all for this post on ‘#12 companies with the highest share price in India’. Most of the companies on this list are trading at a high PE. If you want to buy any one of them, then please study the company carefully. Just being the costliest shares in India doesn’t make them a good pick for investment. Moreover, past performance does not guarantee future returns.

Further, do comment below which other stocks can find a place in this list of companies with highest share price in India by next year (October 2021)? And which ones will be thrown out of the list, according to you? Happy Investing!

LIC IPO 2020 - Are You Ready? | Expected IPO Dates & Details cover

LIC IPO 2020 – Are You Ready? | Expected IPO Dates & Details

LIC IPO 2020 Details: Earlier this year Finance Minister Nirmala Sitharam announced during the 2020-21 budget that the government would sell a part of its holdings in LIC through means of a public listing. Judging by the size of the company it could be the largest IPO the country has seen. The IPO of LIC may even be bigger than this expectation as the government also plans to incentivize the participation of retail investors by offering discounts on IPO price and issuing bonus shares.

Today we take a look at where the IPO stands as we almost near the end of 2020. In this LIC IPO article, we’ll discuss a brief history of IPO, why the government is going for LIC IPO, the Expected dates of LIC IPO, and much more. Let’s get started.

LIC India – Brief History

LIC was founded in the year 1956 and is wholly owned by the government. The state-owned life insurance and investor is the oldest and the largest in the country. The company is headquartered in Mumbai. There are currently 24 insurance companies operating in the country but none of them come close to LIC which holds a 69% market share. 

Moreover, As of 2019, Life Insurance Corporation of India is the biggest insurance company in India and had a total life fund of ₹28.3 trillion. The total value of sold policies in the year 2018-19 is ₹21.4 million. LIC settled 26 million claims in 2018–19. It has 290 million policyholders. The company is estimated to have assets worth Rs. 34 trillion.

The government had initially expected to offload a 10% stake. But later revised it to 25% as SEBI guidelines state that within 3 years of listing the minimum public shareholding should be at least 25%. The government is expected to incentivize retail investors with a 10% discount followed by a bonus issue. Of the shares offered 5% of the shares are expected to be reserved for retail investors and employees of LIC.

This IPO is expected to increase transparency in the affairs of the company as all financials will be required to be released to the shareholders. The company’s investments in bonds and equity are expected to come under greater scrutiny post the listing.

lic details financials

(Source: LIC Annual Report 2019-20)

When will the LIC IPO be held?

Currently, the LIC IPO stands delayed due to the COVID-19 pandemic and its occurrence depends on future market conditions. The pandemic has delayed a lot of the pre IPO work.

  • IPO Date: Yet to be Announced (Expected Q4 2020/21)
  • Price Band: —
  • Minimum Lot Size: —
  • Issue Size: —

The government still has to value its business and value its physical assets. Valuations of the company are expected to be completed in a short period of time but valuations of its physical assets which is the most crucial part of the pre IPO process may take from 6-8 months. This means that the IPO will not hit the markets this year. The earliest estimates state that the IPO may occur in the 4th quarter of 2020-21.

The LIC IPO 2020 will offer a good opportunity to retail investors and the company’s employees to become investors in one of the most reputed companies in India. Moreover, the IPO may also offer listing day gains to the shareholders. Further, whether LIC Policyholders will get any reserved quota in this IPO is yet to be decided.

Why has the government chosen to disinvest LIC?

The government plan to sell LIC is part of its Rs. 2.1 trillion disinvestment plan which was announced in the budget. The government expects to raise up to Rs. 90,000 crore from LIC and IDBI bank stake sales. Out of this, the government aims to raise Rs.20,000 cr. from sales of IDBI. As of September, the government has raised Rs 4.99 trillion through its disinvestment process. There is very little to rejoice about as the Narendra Modi government will have to use this to try and bridge the budget gap that has now been widened due to the coronavirus lockdown.

The LIC IPO will contribute significantly to the governments’ aims to meet its funding requirements Unfortunately the governments plan to disinvest its stake in LIC and other companies like Air India, BPCL, Concor have been delayed due to the pandemic. 

As the government is required to give up 25% of its stake in the company, the proposed IPO is estimated to be worth Rs.3 lac cr. This raises the problem as the market may not find sufficient buyers in India. In order to combat this, the government has decided to disinvest in tranches starting with 10% but this too may not be absorbed by the domestic markets. Hence, the government has looked into listing the company in overseas bourses in order to attract large investors. With the decision still in progress, the government has already received pitches from global stock exchanges.

Also read: ‘Vi’ – Vodafone-Idea Rebranding’s Reasons and Benefits!!

Closing Thoughts

The Price of the IPO is not known as the price is generally announced a week before the shares are opened up for the subscription. There is a good probability for oversubscription especially after considering that investors around the world and retail investors domestically have been left dry especially if they are IPO hungry as many IPO’s have been derailed.

The LIC listing could turn out to be bigger than expected and could turn LIC into India’s biggest companies in MCAP that can compete with the likes of Reliance and TCS.

Why do companies like MRF don’t split the stock

Why Do Companies Like MRF Don’t Split the Stock?

Ever wondered why do companies like MRF don’t split the stock? If you check the current market price of MRF Share, it’s hovering at a whopping price of Rs 60,499 per share. It’s all time high for the last 52 weeks is 73,565.70. Even though the price of one share is too high for this company, the interesting question here is why the MRF’s management/promoters are not splitting its shares? After all, buying a stock at Rs 60,499 per share is not financially viable for most of the retail investors.

In this article, we are going to answer the same. Here, we are going to discuss why companies like MRF don’t split the stock. However, before we discuss these expensive stocks, let’s first study why companies split their stocks?

mrf share price last 5 years

Quick Note: If you are do not know what is stock split and bonus shares, then check out this post first- Stock split vs bonus share – Basics of stock market

An Interesting study on companies that Rapidly Split Stocks in Past

You might have heard about the wealth creation story of Infosys. A small investment in the 100 shares of Infosys in 1993 would be worth over Rs 6.04 crores by now. (Also read: How to Earn Rs 13,08,672 From Just One Stock?)

In the last 25 years, Infosys has given multiple bonuses and stock splits to its shareholders. And, that’s why the share price of Infosys is still in the affordable purchase rate for the average investors. In fact, if Infosys has not given so many bonuses and splits, the price of one share of Infosys might have been over multiple lacks by now. Here is the bonus and split history of Infosys since 1993 till 2018:

infosys split

(Source: Moneycontrol)

Besides, Wipro is another common stock with a similar story. Because of its consistent bonuses and splits, the Wipro share is still in the purchase range for the retail investors. Else, if the management had decided not to give any split or bonus, then the share of Wipro might also have been over multiple lakhs and maybe over crores by now. (Also read: Case Study: How 100 shares of WIPRO grew to be over Rs 3.28 crores in 27 years?)

The big question – Why do companies split a share?

Here are four common reasons why companies split their shares-

  1. Stock splits help to make the share price affordable for retail investors. For example,  if a company is trading at a share price of Rs 3000 and it offers a stock split of 10:1, then it means that its price will drop to Rs 300 per share after the split. Now, which price is more affordable to the public- Rs 3,000 or Rs 300? Obviously, Rs 300.
  2. The stock split makes the stock more liquid and hence increases its trading volume. This is because the total number of outstanding shares increases after the stock split.
  3. Splitting a stock does not affect the financials of a company. Although the outstanding shares of the company will increase after the split, however, the face value will decrease in the same proportion. Overall, stock splits don’t affect the financials and hence the companies are willing to go for it.
  4. As small and retail investors are more interested in affordable shares, stock splits help in increasing their participation and overall helps the companies to build a broadly diversified investor base for their stock.

Overall, in terms of value, the stock split doesn’t matters much as the financials of the company remains the same. However, by splitting the shares- the company is able to keep the shares affordable to the public and hence maintains a wide ownership base.

Companies that do not split their shares – List of few Costliest Shares!

The reasons to split shares might be clear by reading the above paragraph. However, the next big question is why few companies do not split their shares? Why the share price of many stocks in the share market is still in the 5 figures if they have an option to split their stocks.

If you check the current market price of the companies listed on the Indian stock exchange, you can find out that there are many companies whose share price is above Rs 10,000. Here are a few of the top ones:

S.No.Company NameShare Price (Rs)MarketCap (Rs Cr)Current PE
1MRF60269.9525554.4621.98
2Honeywell Auto32198.4528463.4360.03
3Page Industries20627.2522999.38119.17
4Shree Cement20296.9573232.9149.08
53M India18795.821182.87111.77
6Abbott India15975.3533947.6251.72
7Nestle India15876.85153077.7973.59
8Bosch13291.7539202.2178.23
9Tasty Bite Eat.10598.152719.4978.62
10Bombay Oxygen10350.05155.25---
11P & G Hygiene9872.2532046.0574
12Bharat Rasayan9176.83900.1424.07
13Sanofi India8748.420147.5739.07
14Dixon Technolog.8719.710088.82102.4
15Yamuna Syndicate8644265.693.5
16Polson8028.896.3519.39
17Maruti Suzuki6892.4208205.6251.63

Quick Note: The above prices and values are updated till Oct 2020!

All these shares are not easily affordable for the average retail investor. Even the shares of Maruti is trading at a current price of above Rs 6,800. 

Why Do Companies Like MRF Don’t Split the Stock?

Here are a few common reasons why few companies do not split their shares:

1. They are already doing good. Why bother to split?

Many of these companies are already good. Then, why should they bother to split the share and make it cheap?

For example- MRF was trading at a share price of Rs 8,786 in October 2010. Currently, as of October 2020, it is trading at Rs 60,499. The people might have argued that the stock was expensive and not affordable even in 2010. However, it has done pretty well in the last 10 years and given a return of over 588% to its shareholders.

MRF share price all time - why Companies Like MRF Don’t Split the Stock

In short, if a company is doing good, they why it should bother to go through the splitting process. It’s already making money for itself and its investor, even when the share price is expensive.

2. Fewer public shareholding

The high share price of a company results in low public shareholding. Retail investors and traders can’t easily enter such stocks. Sometimes, this also helps in decreasing the volatility in the share price. Moreover, by allowing the high share price, the promoters tend to keep the voting right in their hands. This helps in maintaining a static voting right which allows the owners to make key decisions without much interference.

Besides, fewer public shareholding also helps in avoiding scenarios like creeping acquisition or in worst case hostile takeovers. Expensive stocks discourage acquisition.

3. No financial benefits

There are no financial benefits while splitting the shares. The value of the stock remains the same after stock splitting (the financial statements and ratios don’t change). That’s why until and unless the promoters have any good enough reason, the share splitting does not appeal much to the management and promoters.

4. Keeps traders and speculators away:

The stock split increases liquidity and makes the stock affordable. This results in an increase in the participation of retail investors and traders. And with an increase in participation, speculation also increases. On the other hand, a high share price helps to keep the traders and speculators away from the stock. Only serious investors are the ones who can find these companies appealing and might want to enter these stocks.

Another benefit of the high share price is that it keeps the newbie investors away from them. As the new investors are mostly attracted to the affordable companies and are not willing to invest a high amount, therefore their participation in quite low in these companies.

5. Symbol of Status and Uniqueness

Do you know that one share of Warren Buffett’s company- Berkshire Hathaway costs around Rs 2.3 crores? Yes, that’s true. The current share price of Berkshire Hathaway Inc. Class A is $3,15,350.00

A high share price can be sometimes regarded as a symbol of status. Splitting that share means losing this exclusiveness.

Closing Thoughts

There are no specific guidelines or rules from SEBI or any stock exchange about a stock split. Therefore, the prices of the shares can go as high as it can and the company is not obliged to offer any split.

As we discussed in this article, there are both pros and cons of a high share price. The biggest advantage of a high share price is that it helps to keep the traders and speculators away from that share. Anyways, a company might choose whether it wants to split a share or not- depending on what suits them best for their interests.

That’s all for this post on Why Do Companies Like MRF Don’t Split the Stock.. I hope it was helpful to you. If you still have any doubts/queries on this topic, feel free to comment below. I’ll be happy to help. Take care and Happy Investing!

Why Adani Green Shares are Rallying cover

Why Adani Green Shares are Rallying?

Stock analysis on why Adani Green shares are Rallying: Over the last year, the shares of Adani Green Ltd. have multiplied investor fortunes by over 12 times. This is the first company in the Adani Group led by Gautam Adani to cross the Rs. 1 trillion market capitalization.

This also made Adani Green the top solar generator globally. Today we take a look at the reasons for this increase.

adani greeen share rally

Adani Green Energy Ltd. is currently the largest solar power producer in the world. AGEL is part of the diversified Adani Group. AGEL established its first solar project in 2015 and had completed just two solar projects by 2017. The Company went public in 2018 in plans to accelerate its growth to meet its targets. The company develops, owns, operates, and maintains utility, scale, grid-connected solar, and wind farms. 

What was the cause of the Adani Green share rally?

Here are a few of the potential reasons why Adani Green shares are rallying:

1. Infrastructure Potential

What was the cause of the Adani Green share rally?

Adani group tops among global solar developers because of its 2.3 GW operational projects, 2GW under construction. In addition to these, earlier this year in May AGEL won the world’s largest solar bid of 8GW worth $6 billion ( 45,000 crores) by the Solar Energy Corporation of India (SECI). This puts AGEL’s total capacity at 12.3GW. According to Mercom Capital, this puts AGEL at the no. 1 spot in the latest ranking of global solar companies by Mercom Capital.

In the last 3 years, AGEL’s capacity base grew 3.4 times, and the 8GW project awarded by SECI will ensure that this is carried forward. This also AGEL on track to achieve its target of reaching 25GW of renewable energy capacity by 2025.

AGEL is currently in the final stages of its talks regarding the takeover of 205 MW solar power plant owned by Essel Group. In order to meet the construction needs of 4 upcoming projects, AGEL has begun discussion with lenders like Standard Chartered Bank, JPMorgan, MUFG, Barclays, DBS Bank, and Qatar National Bank, among others.

2. Net Profit

Another reason that added to the rally was the net profit of Rs 55.64 crore from Q4 of the last fiscal announced in May this year. In the year before AGEL had reported a net loss of Rs. 94.08 crore in the corresponding quarter. The total income of the company during Q1FY21 rose to Rs 878.14 from Rs 675.23 crore in the same period last year.

Lower expenses were one of the factors responsible for profits this year. The company mentioned a change in the depreciation method. This led to a reduction in depreciation and amortization.

3. Global Interests

AGEL growth had sparked global interests in the firm. Earlier this year in April Total invested Rs. 3707 crore for a 50% partnership with Asian Green. Total is a global energy giant that produces market fuels, natural gas, and low carbon electricity. Total did this through its subsidiary Total SA which will enter into a 50:50 joint venture with AGEL.

Last week Vanguard Group too acquired 1,30,84,019 equity shares in AGEL leading to 3% gains on the stock price.

Closing Thoughts

Adani Green can produce over 12 GW and targets 25 GW by 2025. But does this warrant its Mcap exceeding Rs.1 Lac crore? Its production estimates peg the total cost at Rs. 30,000 crore. This is after considering Rs. 5 crores spent for each MW making the 1 lac crore value exceeding. NTPC a conventional energy producer has 19 times the operating asset base and much higher revenue but still is valued less than Rs.90,000 crores.

A good portion of the price increase is the future anticipation that the company will perform due to its infrastructural potential, increasing profitability, and global interest is shown above.

Apart from this, it is impossible to address that AGEL is present in multiple hurdles present like the huge cost of capital from secured rights for large-scale land requirements and transmission connectivity which is available to establish large players. AGEL also benefits from the high growth potential of the renewable industry which is also pushed for by the Indian government.

Indian Electricity & Power Sector theme

Indian Electricity & Power Sector – Key Companies in 2020!

An analysis of a list of companies in Indian Electricity & Power Sector: The first electric street light in Asia was lit in Bangalore on 5th August 1905. Despite what seems like a headstart the electrification of India seemed like an uphill battle in the last for almost a century. However, in the last decade, India has begun to make strides not only in extending electrification throughout the country but also introducing greener alternatives.

Today, we take a look at the possible future prospect on the Indian electricity & power sector and top players that are present in the current environment.

future prospect on the Indian electricity & power sector

Indian Electricity & Power Sector

India is the third-largest producer and second-largest consumer of electricity in the world. India had an installed power capacity of 371.97 gigawatts (GW) as of July 2020. When we take a look at the growth opportunities in this sector their prospects can be viewed in the two plans already put forward by the government. The first being the governments’ vision of ensuring 24×7 affordable and quality power for all.

According to the Ministry of Power, the Saubhagya mission which had begun in 2017 where 100% of households in 25 states would be electrified has already been achieved. The only states left out were Assam, Rajasthan, Meghalaya, and Chhattisgarh.

100% electrification, however, does not mean that going forward there will be limited opportunities isolated only to the remaining four states. India’s energy demand is expected to double by 2040 and also has the potential to triple. This is mainly because of the rising Indian temperatures and increased appliance ownership among consumers. This would require India to add massive amounts of power generation capacity in order to meet the demand from the 1 billion airconditioning units the country is expected to have by 2050.

indian power industry

Another government initiative that offers growth potential in the sector is its plan to double the electricity generation capacity of renewable energy. As of 2018, India ranked fourth in wind power, fifth in solar power, and fifth in renewable power installed capacity. If government plans are successful the shared electricity generated through renewable would increase to 40% by 2030. Currently, the electricity sector is dominated by fossil fuels like coal. In the 2018-19 fiscal these fossil fuels produced about three-quarters of the country’s electricity.

Quick Fact: Did you know that Bhadla Solar Park is located in Bhadla village, in Rajasthan’s Jodhpur district is claimed to be the largest solar power plant in the world. Spanning 14,000 acres, the fully operational power plant has been installed with a capacity of nearly 2,250 megawatts (MW).

Top companies in Indian Electricity & Power Sector

1. Power Grid Corporation Of India Ltd.

Power Grid Corporation Of India Ltd.

Power Grid Corporation of India Limited (POWERGRID) was incorporated on 23 October 1989 as a public limited company, wholly owned by the Government of India. The company is engaged in the power transmission business with responsibility for planning, implementation, operation, and maintenance of inter-state transmission system and operation of national and regional load dispatch centers.

Its transmission network consists of roughly 164,511 ckm Transmission Lines and 243 EHVAC and HVDC substations, which provides a total transformation capacity of 3,67,097 MVA. POWERGRID transmits about 50% of the total power generated in India on its transmission network. The government of India currently holds a 51.34% stake in the company and the balance 48.66% is held by the public.

2. NTPC Ltd.

NTPC India

NTPC Limited is an Indian Public Sector Undertaking company, which is engaged in the generation and sale of electricity. The company generates electric power using coal-based thermal power plants and is headquartered in New Delhi. The company has also ventured into oil and gas exploration and coal mining activities. It is the largest power company in India with an electric power generating capacity of 62,086 MW. It contributes over 25% of the total power generation of the country. 

The company has approximately nine joint venture stations, which are coal-based. It also holds approximately nine renewable energy projects. The company’s subsidiaries include NTPC Electric Supply Company Limited, NTPC Vidyut Vyapar Nigam Limited, Kanti Bijlee Utpadan Nigam Limited, Bhartiya Rail Bijlee Company Limited, and Patratu Vidyut Utpadan Nigam Limited.

3. Adani Transmission Ltd.

adani transmission

Adani Transmission Limited is a holding company. The Company operates as a power transmission company. It is engaged in the transmission of electric energy. Despite only being incorporated in just 2013 it is already one of the top companies in the sector. The company owns, operates, and maintains approximately 5,050 ckm of transmission lines.

4. NHPC Ltd.

NHPC Ltd

NHPC Limited ( National Hydroelectric Power Corporation) is a Public Limited Company and was incorporated in the year 1975. It was created with the objective to generate hydroelectric power. The government of India and State Governments holds a 74.51% stake within the Company while the remaining 25.49% is public.

Over the years the company has diversified into other sources of energy like Solar, Geothermal, Tidal, Wind, etc.

5. Tata Power Company Ltd.

Tata Power

Tata Power Company Ltd is India`s largest private sector power utility with an installed generation capacity of over 10,577 MW. The core business of the company is to generate, transmit, and distribute electricity. Tata is one of the few companies that are present in all segments of the power sector viz Generation (thermal, hydro, solar, wind, and liquid fuel), transmission, and distribution.

6. Adani Green Energy Ltd.

Adani green

Adani Green Energy Limited (AGEL) is one of the largest renewable companies in India. The company was incorporated in 2015 and is part of the Adani Group. In 2017, the company took complete control of the overall solar energy portfolio of Adani Enterprises.

The Company operates and maintains utility-scale grid-connected solar and wind farm projects. AGEL broke into the news in September 2020 when the stock price of the company grew 1300% in one year and they posted a profit in the year 2019-20.

Also read:

Closing Thoughts

The power sector has immense opportunities in a country like India. But before investing it is also important that the investors inspect other aspects of the industry. For a long, time the power sector has found itself debt-ridden. This was primarily because of the lack of trickle-down of payments from the DISCOMS( Power Distribution companies) to the GENCOMS( Power Generation Companies). Another aspect that the investors must take caution is the viability of renewable energy companies.

Although they are marketed as a safer future, it is important to note that they too come at environmental costs and significantly higher economic costs all the while producing only a fraction of the energy in comparison to other fossils fuels. This affects both the motive i.e greener earth and the profitability prospect of the company.

Indian Auto Ancillary Industry - Top Companies in 2020

Indian Auto Ancillary Industry – Top Companies in 2020!

A Study on top companies in Indian Auto Ancillary Industry: The Auto Ancilliary Industry includes companies that provide supporting equipment to the primary products of a vehicle company. This support may be in the form of Tyres, Battery, Brakes, Suspension, etc.

Such industries enable vehicle companies to focus on their core competencies while they are able to produce quality parts they specialize in. The high growth prospects of the Auto Ancillary Industry makes it one of the sunrise industries in the Indian markets. Today, we take a look at the Auto Ancillary Industry in India and its top players. Let’s get started.

top companies in Indian Auto Ancillary Industry

The Auto Ancilliary Industry in India

The Auto Ancilliary sector from India is mainly focussed domestically and does not play a large role globally. But this tips the scale in its favor when we look at the strides it can make in terms of growth. An Auto Ancilliary Industry is heavily dependent on the Automobile Industry. Luckily enough the Indian Automobile industry is the world’s fourth-largest, with the country currently being the world’s fifth-largest manufacturer of cars and seventh-largest manufacturer of commercial vehicles in 2019.

The Auto Component Manufacturers account for 2.3% of India’s Gross Domestic Product (GDP) and employs as many as 1.5 million people directly and indirectly each. Currently, the turnover of the industry stood at Rs 1.79 lakh crore (US$ 25.61 billion) in FY20 (till September 2019) and the export of auto components grew 2.7 percent to reach Rs 51,397 crore (US$ 7.35 billion) during the same time.

As per Automobile Component Manufacturers Association (ACMA), automobile components export from India is expected to reach US$ 80 billion by 2026. The Indian auto components industry aims to achieve US$ 200 billion in revenue by 2026.

Top Auto Ancilliary Companies in India

A. Tyre Segment

1. MRF Limited

MRF LimitedMRF Limited is India’s Largest Tyre Company in terms of total sales and MCAP. The company initially started off in Madras as a balloon factory.  It was in 1952 that the company decided to enter rubber manufacturing.

MRF today has come a long way to not only have a quarter of the market share but also has extended its presence to 65 countries. MRF makes and sells tyres not just for passenger cars and motorcycles, but also for trucks and buses, farm machinery, Pickup, 3-Wheeler, etc. The company also manufactures other rubber products such as conveyor belts and toys.

2. Balkrishna Industries Limited (BKT)

Balkrishna Industries Limited (BKT)

Balkrishna Industries Limited (BKT) is a leading manufacturer that specializes in the Off-Highway tire market. This includes specialist segments like mining, earthmoving, agriculture, construction, and other industrial tyre segments.

The company was founded in 1987 and since then has achieved the status of one of the best quality tyre brands in India. BKT has developed into a global player in the Off-Highway tire industry with a 6% global market share. Balkrishna Industries predominantly caters to the replacement market in North America and Europe. The  Italian football second division, Serie B is known as Serie BKT after Balkrishna Industries purchased naming rights.

3. Apollo Tyres

Apollo Tyres

Apollo Tyres was founded in 1972 and is headquartered in Gurgaon, India. Since then it has become one of the leading global suppliers of tyres and boasts a presence in over 100 countries. The company markets its products under two brands Apollo and Vredestein.

If tyres that come as original fitment with new vehicles are considered then Apollo Tyres takes the top spot. The company currently makes radials for cars, bikes, and a host of other commercial vehicles.

4. CEAT Ltd

CEAT ltd

CEAT is one of India’s leading tyre manufacturers today and has a strong global dominance. It was founded in 1958 and is now headquartered in Mumbai. CEAT, however, was not originally an Indian company. It was originally founded in Italy(1924) and the name CEAT was an abbreviation for ‘Cavi Elettrici e Affini Torino’. It was in 1982 that the RPG Group acquired the company.

Today, it makes tyres for cars, bikes, trucks, SUVs, Auto-rickshaws, buses, tractors, and various other vehicles. CEAT produces over 165 million tyres every year and offers the widest range of tyres to all segments and manufacturers.

5. Goodyear India

Good year IndiaGoodyear is one of the world’s oldest and largest tyre companies. It was established in the year 1898 and is one of the most recognizable brands in today’s age. Goodyear has been in the Indian markets since 1960 and since then has developed a good understanding of what the Indian consumer wants and delivers accordingly.

Its products in the Indian markets include value offerings, high-performance radials, and rugged, off-road-ready tyres. Apart from this, Goodyear is known for supplying radials to Formula One cars and also serves airplanes.

B. Battery Segment

1. Exide Industries

exide industries

Indian company Exide is one of the biggest manufacturers of batteries in the whole world. The company as old as independent India itself was incorporated as  Associated Battery Makers (Eastern) Ltd. The company was renamed Chloride Electric Storage Co (India) Ltd and then again in 1995 the name was changed to Exide Industries.

Exide today forms a large portion of India’s battery exports. The company supplies automotive and industrial lead-acid batteries ranging from 2.5Ah to as high as 20,500Ah.

2. Amara Raja Batteries

amara raja batteries

Amara Raja Batteries is one of the largest manufacturers of lead acid batteries for both industrial and automotive applications. It sells its products under the brand Amaron and Powerzone. Amaron is the second-largest selling automotive battery brand in India. Powerzone on the offers a wide range of inverters, home UPS and inverter batteries.

The company not only makes batteries for distribution in India, but exports its products Africa, Asia Pacific, and the Middle East.

3. HBL Power Systems LTD

HBL Power Systems LTD offers specialized batteries and finds its biggest buyers in the aviation industry. The company was founded in 1997 and successfully developed its first product i.e an aircraft battery. Over the years the company also began manufacturing custom-designed, high-quality, cost-effective batteries to meet the needs of various core industries.

Apart from airways, the firm distributes its batteries to other sectors like railways, defense, and other heavy industries.

C. Other Auto Ancillary Industry Companies

1. Bosch Ltd

bosch ltd

Bosch is originally a German engineering and technology MNC founded in 1886. The company entered India in 1922 but ventured into the auto ancillary only in 1951 after purchasing a 49% stake in Motor Industries Company Ltd (MICO).  In 2008 MICO was renamed to Bosch Ltd.

Although the company functions in areas like Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology 84% of its revenues from India come from its automotive business. Bosch currently has a turnover of over $3 billion and 18 manufacturing sites, and seven development and application centers.

2. Motherson Sumi Systems Limited (MSSL)

motherson sumi systems limitedMotherson Sumi Systems Limited (MSSL) was established in 1986 through a  joint partnership between Samvardhana Motherson Group and Sumitomo Wiring Systems of Japan. MSSL is one of the leading auto component manufacturers. They specialize in automotive wiring harnesses, dashboards, door trims, bumpers, mirrors for passenger cars, and is also a leading supplier of plastic components and modules to the automotive industry.

The company recently acquired 80% of the stock of a German-based company called Peguform Group.

3. Endurance Technologies

endurance technologies

Endurance Technologies Limited was incorporated on December 27, 1999. The company is one of India’s leading automotive component manufacturing companies. The company manufactures and supplies a diverse range of components.

Its products include aluminum Die–Casting Products, two-wheeler aluminum alloy wheels, shock absorbers, front forks for motorcycles and hydraulic and gas-charged dampers, struts, gas springs clutches, friction plates, hydraulic disc brakes, rotary brake discs, hydraulic drum brakes, and tandem master cylinders. The company has 16 manufacturing plants within India 2 in Germany.

4. WABCO India Limited

wabcoWABCO India Limited is a leading supplier engaged in manufacturing automotive components and related services. The Company provides safety and vehicle control solutions to the commercial vehicle segment of the automotive industry.

WABCO is also engaged in the manufacture of air brake actuation systems for commercial vehicles. The Company is also involved in various other segments, such as off-highway, defense, luxury bus, car, and trailers.

5. Sundram Fasteners

sundram fasteners

Sundaram Fasteners established in 1966 is a part of the TVS Group. Over the years they have grown into global leaders, manufacturing critical, high precision components for the automotive, infrastructure, windmill, and aviation sectors.

In Auto Ancillaries the company produces iron powder, tappets, shafts and hubs, couplings and gears, gear shifters, automotive pumps, radiator caps, hot forged components, cold extruded parts, powder metal components, and high-tensile fasteners.

Also read:

Closing Thoughts

The auto ancillary industry is in the growth phase and is expected to grow at a double-digit CAGR between the period 2019-2026. Although investing in the Auto ancillary industry seems to be attractive it is important to note that all rumors to the automobile sector are also felt in the auto ancillary industry. These include impacts from festival seasons, credit crunch, bank interest rates, fuel costs, etc.

Another important factor that is expected to have a significant impact on the industry in the coming years is the push for Electric vehicles. Hence for inventors looking for long term investments selecting a company that is in tune with the changing needs into the electric segment would be optimal.

Indian Pharmaceutical Industry - Major Pharma Shares in India cover

Indian Pharmaceutical Industry – Best Pharma Shares in India!

Quick analysis of major shares in the Indian Pharmaceutical Industry: There is no other industry in the country that has achieved a global stature as that of the Indian Pharmaceutical Industry. The fact that the Indian Pharmaceutical industry has the possibility of soon being called the ‘Pharmacy to the World’, speaks volumes.

Today, we are going to discuss Indian Pharmaceutical Industry along with the major pharma shares in India. Here, we will give you an insight into the current state of the Indian Pharmaceutical Industry and the top-performing Indian companies.

Indian Pharmaceutical Industry

Role Played by the Indian Pharmaceutical Industry

The Indian Pharmaceutical Industry plays a very important role in the global pharma markets. The industry supplies over 50 percent of global demand for various vaccines, 40 percent of generic demand in the US, and 25 percent of all medicine in the UK. Presently, over 80 percent of drugs used globally to combat AIDS are sourced from India.

India also constitutes 40 to 70 percent of supply to the World Health Organization’s demand for DPT and BCG vaccines and 90 percent of the global demand for the measles vaccine. Indian drugs are exported to more than 200 countries in the world making it the largest provider of generic drugs globally.

The Indian Pharma industry has been able to achieve this because of its unique characteristics. The drugs produced by Indian companies are low priced but still maintain the high regulatory standards of markets like the US and Europe. The reason for the drugs being of low price is mainly due to the large labor pool available. This also includes scientists and engineers with potential in comparison to their counterparts abroad.

The industry also reveals a highly competitive domestic environment which keeps the prices low. The low prices are one of the reasons why although India ranks tenth globally in terms of value but third in volume. The low prices coupled with the high quality offered which fall in line with the USFDA standards make the drugs not only accepted but also demanded everywhere in the world.

Growth prospects of the Indian Pharma Industry

Growth prospects of the Indian Pharma Industry

Data from 1969 would help us better understand the growth prospects and the potential of the Indian Pharma industry. As of 1969, the Indian domestic market was dominated by foreign players holding a 95% market share. As of 2020 Indian pharma has an 85% domestic share and alone accounted for 15% of the global market. Pessimistic estimates have shown that the Indian Pharmaceutical market is expected to reach a value of between US$50 billion and US$74 billion by 2020.

This growth is mainly driven by the growth in medical infrastructure within the country. This would extend the accessibility to sections that lacked such healthcare before. The rising awareness and the ability to afford medicines will also account for a significant portion of domestic growth. India is projected to become one of the top 10 countries in terms of medical spending. 

top 10 pharma companies

By 2040, India is also predicted to be the most populated country on earth, overtaking China. Other reasons for a boost in the global growth of Indian pharma would be the increase in branded drugs becoming off-patent over time. All these reasons coupled up would account for domestic growth making India attractive to international investors.

As global developed markets slow down, emerging markets like India, Russia, China, Brazil will account for greater roles in the pharma industry both as producers and consumers.

Pharmaceutical Industry – Best Pharma Shares in India

1. Sun Pharma

Sun Pharma

Sun Pharmaceuticals is Indias largest pharmaceutical company and the fifth largest specialty generic company in the world. The MNC was established by Mr. Dilip Shanghvi in 1983 offering products to treat psychiatry ailments. 

Today the company offers its capabilities by producing branded generics, specialty, OTC products, antiretrovirals (ARVs), active pharmaceutical ingredients (APIs), etc. Its formulations treat various areas like cardiology, psychiatry, neurology, gastroenterology, and diabetology.

2. Aurobindo

Aurobindo Pharma Ltd.

Aurobindo Pharma was established in 1986 by Mr. P. V. Ramprasad Reddy, Mr. K. Nityananda Reddy, and other committed professionals. The company first began operations in a single manufacturing unit of Semi-Synthetic penicillin in Pondicherry. Today Aurobindo Pharma sells over 300 products in over 125 countries.

About 35% of sales are generated through APIs, 65% from the formulations business, of which 63% of formulation sales are from the United States. It is noteworthy that Aurobindo Pharma has one of the highest exposure to imports of APIs from China, mainly for antiretroviral and antibiotic drugs.

3. Lupin

lupin ltd

Lupin Ltd. was established in 1968 and is currently amongst the top 10 generic companies in the world.  Its businesses include formulations, Active Pharmaceutical Ingredients (API), drug delivery systems, and biotechnology. It is also known for growth therapies like Cardiology, Central Nervous System, Diabetology, Respiratory, Gynecology, Anti-Infective, Gastro-Intestinal, and Oncology.

4. Dr. Reddys Labratory

Dr. Reddy’s Laboratories was founded by Anji Reddy in 1984.  The MNC manufactures and markets a wide range of pharmaceuticals in India and oversea,s and has over 190 medications, 60 active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care, and biotechnology products.

5. Cipla

Cipla formerly known as Chemical, Industrial & Pharmaceutical Laboratories was founded by Dr. K.A. Hamied in 1935. The company has its presence around the world and is a therapy leader in India for anti-malarial with a market share of over 34%. The company also has a vast portfolio with more than 1,500 products in the market.

Cipla is known for its key role in selling HIV medicines in sub-Saharan Africa at one–twenty-fifth of the cost of medicines sold by other manufacturers. 

Pharma Industry amidst COVID-19

The Covid-19 pandemic has exposed the reliance of the Indian pharma on China for the procurement of API (Active Pharmaceutical Ingredient). China was one of the leading countries to produce and sell APIs to the rest of the world until recently. The early effects of the coronavirus on China impacted the supply of such API throughout the world.

Pharma’s use Chinese ingredients to produce one-fifth of the world’s supply of medicines. For the number of medicines manufactured the reliance on Chinese APIs is as high as 70%. The figures in the manufacturing of antibiotics are much worse as they rely as high as 90% on Chinese imports.

Pharma Industry amidst COVID-19

Despite this Indian pharma’s have still strived to meet up to the added expectation during COVID-19. The industry has been able to also view the pandemic as an opportunity by providing drugs to many friendly countries. This was seen in situations when countries like the United States requested India to export the anti-malarial medicine — Hydroxychloroquine — in order to combat COVID-19. The industry rising up to the occasions have made global powers realize the potential of Indian pharma’s in becoming the Pharmacy to the world. 

Despite the COVID-19 impact, the domestic pharma industry will grow between 4-6 percent in FY21. Following this it is also expected to have an 8-11% compounded annual growth rate (CAGR) in the FY 2020-2023 period.

Also read:

Closing Thoughts

As seen above, the Indian pharma industry has unlimited potential especially in the post corona environment as global powers become skeptical towards China. In order for the industry to take advantage of the global scenario, the government’s role is of paramount importance.

It is important that the government raises its healthcare spending to 3% of GDP YoY. The lack of focus on directing adequate spending towards healthcare was seen in the shortages of healthcare personnel, equipment, and infrastructure. It is also necessary that both the increase and reduction in prices are regulated.

Extremely low prices have the possibility of making Indian pharma’s an unattractive investment opportunity. This may wipe out up to a $20 billion market opportunity. Another aspect that requires attention is the increased focus required in the AatmaNirbhartha of API. COVID-19 has shown both the cracks and the possibilities that the Indian pharma industry possesses.

With the right policies ensuring growth and guiding the industry it is entirely possible that India becomes the “Pharmacy to the World” in the future. 

Investing in Incredible India thematic investments trade brains

Investing in Incredible India – Companies to Look Out!

An analysis of Investing in Incredible India thematic stocks: India is one of the known tourist destinations in the world, thanks to the magnificent monuments, rich cultural heritage, and history. An added advantage has been the diversity offered in every aspect by different states that leaves tourists wondering if they even are visiting the same country.

This tourism is not only limited to options of sightseeing but also includes religious attractions and other medical/wellness tourism that involve Ayurvedic and spa therapy. Today, we have a look at the tourism industry from the perspective of an investor in order to provide insights into what picture it has to offer.

incredible india Taj mahal

An Overview of the Tourism Sector in India 

The tourism sector in India attracts close to 11 million foreign tourists every year. The Taj Mahal alone attracts nearly 6 million people. The domestic tourism industry brings in a huge contribution to the industry The Kumbh Mela saw a whopping 150 million visitors in 2019.

This has resulted in the Indian tourism industry growing at a fast pace (nearly 10% YoY). As of 2018 Tourism industry was one of the major growth drivers of India’s economy contributing close to $250 billion or 10% of the country’s gross GDP.

— What forms part of the tourism sector?

tourism industry in indiaThe sectors that form part of tourism include the following

1) Tours and Travel Agencies

These include tour operators, travel agents, online travel agencies, etc. They offer tours and travel services packages in a single product. These packages include travel, accommodation, and guides These services and packages are also provided online. For eg. Thomas Cook, Cox and Kings, Goibibo, Makemytrip.

2) Transportation

transportation in indiaThe transport sector connects tourists and destinations around the world. This sector is comprised of the Airline Industry, Car Rentals, Water Transport, Railways, etc. If we look into the aviation industry in India, a few of the leading companies are Indigo, Spice jet & Jet Airways. Further, in the railway, the only publically listed company in India is IRCTC.

3) Accommodation and catering

The Accommodation sector forms one of the most integral parts of the tourism industry. This is because tourists need a place to stay and rest. These may range from top-class hotels, camping, or rented accommodations. Taj Vivanta, Club Mahindra, Airbnb, etc. If we look into affordable housings, OYO has made a remarkable presence in this sector.

4) Food and Beverages

Apart from being one of the basic needs, it is also safe to say that this sector alone attracts a portion of tourists both domestic and foreign. This includes restaurants, bars, cafes, nightclubs, etc.

5) Other Connected Sectors

These include attractions, financial services (currency exchange), the entertainment sector( casino, shopping malls, theme parks), etc. For Example Goan Beaches, Imagica waterpark, UB city.

Why should you invest in the Indian tourism sector?

— General Scenario while Investing in Incredible India

Apart from the potential already mentioned above, there are multiple reasons why one should invest in the tourism sector. The most important being the government support. The government has brought forward many schemes like Incredible India in order to market and boost tourism. The government has also allocated funds and introduced policies that are aimed at preserving tourist sites.

In 2014, the government introduced the e-tourist visa which enabled tourists to get an Indian visa quickly online. The government in order to gain tourist confidence also introduced a Tourist police task force specifically established to ensure the safety and security of tourists.

In order to boost the domestic acceptance of tourists, the government also officially introduced slogans like ‘ Athithi Devo Bhava’. It is rare to find another industry where the government has taken the initiative of marketing and maintaining the assets and resources.

Why should you invest in the Indian tourism sector?

— Investing in Incredible India during COVID-19

It may come as a surprise if you were told that there may be a ray of opportunity in investing in the tourism-related sectors during the pandemic we are in. This is because of all the sectors it is tourism that is the worst hit. This has sent the stocks of most tourism dependant companies tumbling.

But it is also important to foresee that the pandemic will end one day with the introduction of a vaccine. This, in turn, has the possibility of leading to an explosion of tourism after people have spent months cooped up in their homes due to fear of traveling.

If not the normalization will also lead to the tourism sector reaching pre-COVID levels. This provides investors the opportunity to buy stocks in a distressed sector that have the ability to weather the storm at cheaper rates increasing the probability of booking returns in the short-term.

Below are some of the companies associated with the tourism industry along. The table includes companies along with the MCAP, Debt to Equity ratio along with their respective promoters pledge.

Name of the CompanyMCAP (In cr.)DEBT/EQUITYPledged Shares
India Tourism Development Corporation Ltd1909.2300
Mahindra Holidays & Resorts India Ltd.2317.8300
EIH Ltd3826.660.090
Thomas Cook1,182.110.250
BLS Internation957.9100
Chalet Hotels Ltd3,239.381.0332.12
Westlife Devolopment5,565.150.320
VRL Logistics1346.120.310
The Indian Hotels Company Ltd.9329.730.420
Spicejet Ltd.2793.49(-0.55)44.01
Interglobe Aviation46,544.960.060
Lemon Tree Hotels Ltd1893.470.3134.14

Closing  Thoughts

While Investing in Incredible India theme, one should remember that the tourism industry although distressed currently will not always remain so. The major assets i.e. monuments, cultures, traditions remain despite the pandemic. Selecting stocks that have the ability to weather the storm provides investors with the opportunity to ride the profits in the short term.

5 Top FMCG companies in India in 2020 - Best FMCG Shares cover

5 Top FMCG companies in India in 2020 – Best FMCG Shares

List of the best FMCG companies in India 2020: All our lives depend on FMCG (Fast Moving Consumer Goods) products that satisfy our basic needs. FMCG products are those that have a short shelf life that is produced in high volumes with low cost and are made for rapid consumption.

This industry include household items, over the counter medicines, food, personal care items, and stationery and consumer electronics, etc. The fast-moving consumer goods (FMCG) sector is India’s fourth-largest sector and has created employment for more than three million people.

Today, we take a look at the top 5 FMCG companies in India that are responsible for keeping over 1.3 billion Indians on their feet every day.

Top 5 FMCG companies in India in 2020

1. Hindustan Unilever Limited (HUL)

Market cap: Rs 521,882 Cr / PE : 71.20

Hindustan Unilever best FMCG Shares

HUL is one of India’s oldest FMCG companies. It is a subsidiary of Unilever, a British-dutch company. The company was established in 1933 and has headquarters in Mumbai. HUL has served over 2 billion customers for over 87 years.

HUL has over 35 brands across 20 categories such as soaps, detergent, skincare, cosmetics, tea, toothpaste. The brand includes famous names like Surf, Excel, Dove, Lux, Lifebuoy, Clinic Plus, Wheel, Sunsilk, Knorr, Axe, etc.

hul company infographic

2. ITC Limited

Market Cap: Rs 240,076 Cr/ PE : 15.84

itc top fmcg share in indiaITC Ltd. has flourished in the Indian markets for over 110 years giving them a deep understanding of the Indian Consumer. The ITC is known to guarantee a certain standard in production and packaging. They have broad distribution channels in India. This has allowed them to penetrate into even the most rural areas through several retail shops.

Their products include Bingo, Sunfeast, Aashirvaad, Fiama Di Wills, Vivel, Savlon soaps and handwash, Papercraft, and Classmate. ITC sells 81% of the tobacco products in Asia including brands like Wills Navy Cut, Gold Flake Kings, Silk Cut, India Kings, Bristol, Gold Flake Super Star, Gold Flake Premium Lights, Classic Menthol, etc.

ITC company infographic

3. Nestlé India

Market Cap: Rs 159,330 Cr / PE : 80.90

Nestle India top fmcg companies in India

Nestle is a transnational food and beverage company headquartered in Switzerland. Globally the company has been around for more than 150 years. In India, Nestle dates back to 1912 when it began operating as Nestle Anglo-Swiss Condensed Milk Company. They cater to the nutritional and wellness requirements of Indian consumers. In 2016, they were rated 33 in Forbes list of largest public companies.

Nestle sells a plethora of products including beverages, bottled water, milkshakes, breakfast cereals, instant foods, performance, and health care nutrition, etc. A few of the 2000 brands they currently own are Nescafe, Maggi, Milky Bar, Kit Kat, Bar One, Milkmaid, Nestea, etc.  How Nestle India Makes Money(1)

Quick Note: If you want to look into the financials and fundamentals of these companies, you can find it on our stock research and analysis portal here.

4. Britannia Industries

Market cap: Rs 93,866 Cr / PE : 63.18

britannia industries fmcg companies in India

Britannia Industries is one of the oldest food-producing companies in the country. It was established in 1892 in Kolkata with an initial investment of merely Rs. 295. Their products are available in more than 5 million retail outlets. More than 50% of Indian households are proud users of their range of food items. The FMCG is known as the first Zero Trans Fat Business in the country. They have an extensive distribution network in India and 60 other countries. 

how britannia ind makes money

Their products include Good Day, Tiger, Milk Bikis, Bourbon, Marie Gold, Cake, Cheese, Milk, and Yogurt. The company is the largest brand in the organized bread market.

5. Marico

Marketcap: Rs 46911 Cr / PE : 41.40

marico fmcg company

Marico was established in 1990 in Mumbai. It began as a brand for coconut and refined edible oil and later expanded into various kinds of consumer goods. It is currently operating in 25 countries in the emerging markets of Asia and Africa. They maintain their innovation in manufacturing and packaging to preserve the tagline “Make a difference”.  

how marico makes money

Marico’s household brand includes Parachute, Saffola, Nihar, Livon, Set Wet, Mediker. Its global products include Parachute, Haircode, Caivil, Black Chic, Isoplus, Code 10, and X-men.

Closing Thoughts

With the ever-growing needs and constantly improving standards of living the FMCG’s play an even larger role. In order to fulfill these requirements, there are several other FMCG’s too that compete for a significant spot in this market. They include Colgate Palmolive, Parle Agro, P&G, The Godrej Group, Amul, Patanjali, Dabur, etc.

how dabur india makes money

In this highly competitive environment, the FMCG’s have managed to keep customers satisfied by reaching out to every nook and corner of the country making each and every FMCG an integral part of the economy.

Top Electric Vehicle Manufactures in India - EVs in India cover

Top Electric Vehicle Manufacturers in India – EVs Outlook & Future!

List of the Top Electric Vehicle Manufacturers in India: When it comes to travel new technologies just keep popping up around the world. These alternative technologies in transport are mainly based around electronic vehicles with many companies jumping on the bandwagon to get some traction before the industry gets a radical shift away from traditional fossil fuels.

This change can also be seen as catchup that existing companies are trying to play in the electric vehicle (EV) segment with companies like Tesla and the bars set by them before its too late. Today, we take a look at the electric vehicle segment in India and the top manufacturing industries for investors to watch out for in this segment.

electric vehicles

Why electric and What is the plan ahead?

One of the major reasons why countries are forced into adopting an electric alternative is climate change. India according to Environmental Pollution Index (EPI) 2018 is ranked 178 out of 180 in terms of air quality. One of the strategies adopted to combat this has been the push for electric vehicles[EV]. This will not only improve the environment but also India’s overall economic health. India currently imports crude oil and which sets us back in a deficit of approx $60 billion. 

The aim set by the government has been 100% electrification by 2030. This is a humungous target considering the early stages of adoption that we currently are in. The electric vehicle adoption rate in India is less than 1% according to a McKinsey&Company report. According to Bloomberg, in the six years leading up to October 2019, India has barely sold more than 8000 electric cars. If compared to countries like China these sales figured are achieved in less than 2 days.  

Top Electric Vehicles (EV) MANUFACTURERS IN INDIA 2020

Some state government realizing their role have tried to eradicate one of the major barriers to owning an EV i.e. the high initial cost. This can be seen in the example of Maharashtra where subsidies were announced amounting to 1 lakh for electric vehicles. Consequently, Maharashtra had the highest sales volume in 2017 in the Indian electric car market. The government has also realized that it is best to target their efforts towards the public transport system in the initial stages.

This is because the purchase of EV in the private sector will depend on major other factors like attractiveness etc. The public transport system being one of the most heavily used in a country like India will definitely offer a huge boost to the sector. 

Top Electric Vehicle Manufacturers in India

The Indian EV industry being in its nascent stages does not have an established market leader in all vehicle types. There are 10+ major players existing in the 2 wheeler segment, 3-4 in Electric buses, and few in car manufacturing. The following are the top  Electric Vehicle[EV] Manufacturers in India.

1. Mahindra Electric

mahindra electrical EV manufacturer in India

Mahindra is the pioneer for EV in the Indian space. Being the first major EV manufacturer it launched Mahindra Reva, its first EV as early as 2001. The Mahindra Reva was India’s first electric car. Over the years Mahindra has gone ahead to set up a dedicated R&D center in Bengaluru.

Some of its other EV variants include the Mahindra E20 and eVerito. Mahindra however has not only focussed on the manufacture of EV’s but also battery packs and has partnered with various institutions in order to boost EV charging.

2. Tata Motors

Tata Motors Electric Vehicles 

Tata is Indias biggest automobile manufacturer  It automobile segment ranges from the manufacture of cars, utility vehicles, buses, trucks, and defense vehicles. Its associate companies include Jaguar Land Rover and Tata Daewoo. But when it comes to the EV segment Tata is a new entrant when compared to Mahindra.  

In India, Tata Motors has an industrial joint venture with Fiat. One of Tata’s major benefits has been its ability to use resources from around the world.  Tata’s innovation efforts are focused on developing auto technologies that are sustainable as well as suited. With design and R&D centers located in India, the UK, Italy, and Korea. Tata Motors in collaboration with its subsidiary, the UK based Tata Motors European Technical Centre (TMETC), are looking to have a major play in the EVs market in India.

When it comes to EV’s, Tata has focussed on the Passenger Vehicles and Electric Buses market in India. When it comes to four-wheelers Tata offers 3 vehicles to pick from. The Tigor EV, Nano EV, and the Tiago electric variant. In the Electric bus segment, Tata expects its demand from State transport Unions. The expected demand is estimated to be around 400,000 buses in the long run.

Apart from EV’s, Tata has also focussed on setting up charging stations in its efforts to improve the industry infrastructure.

3. Hyundai

Hyndai electric vehicles

Hyundai burst into the Indian EV segment with its launch of the Hyundai Kona EV in India. The South Korean global giant in the world of automobiles has stated that Kona was specifically designed to suit Indian operating conditions. One of the USP’s of the vehicle is its 452km range in one charge. This suited perfectly with Indians ‘Kitna Deti hai’ demand when it comes to vehicles.

Just to put things in perspective the range difference of the Kona and other market leaders is in hundreds of kilometers. The Kona, however, has an Ex-showroom cost of Rs.23.8 lakhs making it extremely expensive for Indian markets. Addressing this Hyundai has however said that another EV is in developmental stages keeping affordability in mind in order to serve the mass market. This EV is expected to be ready to enter the market in the next 2-3 years.

4. Ashok Leyland

Ashok leyland electric vehicles

Ashok Leyland,  the Hinduja Group’s flagship company, is the 4th largest bus manufacturer in the world and a market leader for trucks in India. The company has tied up with Sun Mobility in order to enhance its expertise in the vehicle domain.

Ashok Leyland designs electric variants specifically for Indian conditions and has also introduced battery swapping in electric buses to address e-mobility needs in the country. It has launched multiple electric bus variants like the Circuit, HYBUS,  Electric Euro 6 Truck, and announced the iBUS. The immediate focus of the company, however, is currently in giving more thrusts to exports.  

Other leading EV Manufacturers and associated industries

The Indian EV market being in its nascent stages is viewed as an opportunity waiting to be exploited. Other players that also have products in the EV market include MG Motors, Maruti Suzuki, Renault, Audi, Volvo, Hero, Ather, etc. An expansion in the EV industry will also see other associated industries catch on too. This includes the battery and EV chargers. Interests have been shown by many companies like Siemens, Schneider, Delta, etc.

But unfortunately, these companies will only move in once a significant demand arises in the public 4 wheeler segment. On the other hand, one of the major factors for the EV industry not expanding has been consumer concerns regarding the lack of Fast Chargers in India. 

Unorganized and small players are dominating due to the limited scale of business. In order to combat this, the NITI Ayog is laying a key role in setting up EV chargers. There are currently 270 units of installed EV chargers in India. NITI Aayog has partnered with NTPC in order to set up 100,000 EV charging stations across India. Other government entities like BHEL have partnered with ISRO in order to develop batteries using Lithium technologies.

Most lithium requirements are currently imported from China, South Korea, Vietnam, Singapore, and Japan. Other players who have shown interest in the Lithium battery production business in India include Reliance, Suzuki, Toshiba, Denso Corp, JSW Group, Adani, Mahindra, Hero Electric, Panasonic, Exide Batteries, Amara Raja. 

Closing Thoughts

In this article, we discussed the list of the top Electric Vehicle Manufacturers in India, their current work in EV segment, and future prospects. The Indian government had set up the aim of replacing all internal combustion engines with EV’s by 2030. A report from Mckinsey and Company from 2017 indicated that 40% of electrification was a more realistic picture of mobility in 2030. This report, however, was prior to the Pandemic. This, in turn, will further set back electrification in the industry for years to come.

In addition, the steps taken in order to enable acceptance of EV will not suit their main purpose if alternative means of electricity production are not implemented. Currently, up to 60% of the electricity is produced from coal. Although the government has set major aims to bolster the growth of EVs a lot more has to be done in order to ensure they are implemented. 

10 Best Blue Chip Companies in India that You Should Know

10 Best Blue Chip Companies in India that You Should Know!

List of Best Blue Chip Companies in India: If you start counting the numbers, you’ll find that the stocks can be categorized into many groups. Based on market capitalization, they can be defined as small-cap, mid-cap, and large-cap companies. Based on the stock characteristics, there are categorized as growth stocks, value stocks, and dividends (income) stocks.

However, there is one particular type of stock that gets a lot of attention from every kind of investor (beginners to the seasoned players)- and they are the BLUE CHIP stocks. Moreover, when most newbies enter the exciting world of the stock market, they are suggested to look into blue chip stocks as safer investment options. However, being new to investing, most of them are simply confused and are not able to understand what other means when they say blue chip companies.

In this post, we are going to look into what exactly are blue chip stocks and then cover ten of the best blue chip companies in India that every investor should know. Please note that this is going to be a long post, but I promise that it will be worth reading. Therefore, without wasting any further time, let us understand the blue chip companies in India.

A Quick Introductory Story

… but blue chip companies are boring. It’s better to invest in growth stocks with huge upside potentials.”, Gaurav argued energetically.

Yes, blue chips are not the ‘hot’ stocks in the market. However, they are a good option for the investors who are looking for low-risk investments with decent returns.”, I replied.

Gaurav has been investing in the stock market for the last two years and he likes to discuss his investment strategies with me. Nevertheless, his investment style is totally different from that of mine. Gaurav loves to invest majorly in mid-caps and small-cap companies (including penny stocks) which can grow at a fast pace. On the other hand, I like investing in a diversified portfolio.

That’s true, dude. But most of these blue chip companies have already reached a saturation point. They can not continue to grow at the same pace and hence can’t similar returns as they used to give in the past. Once a company has sold a billion products, it’s difficult to find the next billion customers.”, Gaurav challenged me with his witty reply. 

I know the rule of large numbers, Gaurav. Thank you for reminding me. Moreover, I agree that the large-cap companies cannot maintain the same pace of growth forever. But bro, it doesn’t mean that they won’t be profitable in future or can’t give good returns to their shareholders… They have already established their brand. If they use their resources efficiently, they can make huge fortunes for themselves as well as for their shareholders… 

For example- take the case of Reliance Industries. Reliance is a market leader in its industry and has a lot of customers. But they are also using their capital efficiently to grow their business. Two years back, they entered a new market- Telecommunication Industries, and now they are also a leader in that industry.

Because of their strong financials- they were able to bring the latest 4G technology to the Indian market and hence were able to quickly acquire a lot of customers. As the initial set-up cost in this industry is very high, they have created an entry barrier for the small and mid-cap companies. This is what a blue-chip company can do if they use their resources properly.

Gaurav looked a little mind-boggled. That’s why I thought better to give him another example to make him understand the capabilities of blue chip companies.

Let’s discuss another example- Hindustan Unilever. If you think that HUL cannot grow any further because it is a large-cap company, then you might need to reconsider it. HUL already have popular products in the market like Lux, Lifebuoy, Surf Excel etc which are generating them a good revenue from those products. But, they still have a large rural area to cover. They are not so popular in the village areas, are they? So, they can definitely grow in the rural areas…”

…besides, as they have enough resources and financials, they are also continuously working on new product development in their Research & development (R&D) department. If they can make another great product, their profits will add-up in the future….

Finally, when Gaurav didn’t argue further, I concluded-

…a good blue chip company is like Rahul Dravid. If you want fast scorers (or T-20 players), then you may not like his batting style. However, if you are looking for dependable players, then you will definitely appreciate Rahul Dravid’s consistency.”

What are Blue Chip companies?

Blue chip companies are large and well-established companies with a history of consistent performance.  These companies are financially strong (usually debt-free or very low debts) and are capable to survive in tough market situations.

Most of the blue chip companies are the market leaders in their industry. A few of the common examples of blue chip companies in India are HDFC Bank, HUL, ITC, Asian Paints, Maruti Suzuki etc.

best blue chip stocks for long term investment

— Signature Characteristics of Blue Chip Companies

Here are a few signature characteristics which you can look forward while researching blue chip companies—

  1. They are large reputed companies.
  2. They have widely used products/services.
  3. Most of these companies are listed in the market for a very long time.
  4. Blue chip companies have survived a number of bear phases, market crises, financial troubles, etc. But they are still going strong.
  5. Blue chip companies have a strong balance sheet (a large number of assets compared to liabilities) and a healthy income statement (revenues and profits continuously growing for the last few decades).
  6. These companies have a good past track record of stable growth.

Almost all blue chip stocks are older companies. You might already know many of the blue chip companies in India and have been using their products/services in your day-to-day life.

For example-  Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit —- all these products are offered by the same blue chip company in India – Hindustan Unilever (HUL).

New to stocks? Confused where to begin?  Here’s an amazing online course for beginners: ‘HOW TO PICK WINNING STOCKS?‘ This course is currently available at a discount. 

— Why are they called blue chips?

Oliver Gingold- who worked at Dow Jones, is credited to name the phrase ‘Blue Chip’ in 1923. The term ‘blue chips’ became popular after he wrote an article where he used ‘Blue chips’ to refer the stocks trading at a price of $200 or more.  

Quick Note: There are other sets of investors who believe that blue chip companies got its name from the Poker game, as in that game- blue chips are relatively more valuable. Similar to the game, the stocks which are more valuable in the market are termed blue chip stocks.

Although Oliver Gingold used the term ‘blue chips’ for high priced stocks, however, later people started using this word more often to define high-quality stocks (instead of high priced stocks).

— Financial characteristics of blue chip stocks

Apart from the signature characteristics discussed above, here are few key financial characteristics of blue chip companies –

1. Blue chip companies have a large market capitalization -As a thumb rule, the market cap of most of the blue chip companies in India is greater than Rs 20,000 Crores.

2. Good past performance: Blue chip companies have a track record of good past performance (like consistently increasing annual revenue over a long-term).

3. Low debt to equity ratio: The bluest of the blue chips are (generally) debt free stocks. However, a lower and stable debt to equity ratio can also be considered as a significant characteristic of blue chip companies.

4. Good dividend history: Blue chip companies are known to reward decent dividends to their loyal shareholders.

5. Other characteristics: Apart from the above four- few other key characteristics of blue chip companies are a high return on equity (ROE), high-interest coverage ratio, low price to sales ratio etc.

Also read: How To Select A Stock To Invest In Indian Stock Market For Consistent Returns?

10 Best Blue Chip Companies in India:

Now that you have understood the basic concept, here is the list of top 10 best blue chip companies in India. (Disclaimer- Please note that the companies mentioned below are based on the author’s research and personal opinion. It should not be considered as a stock recommendation.) 

Reliance Industries

reliance industriesThis company needs no introduction. Reliance Industries is an Indian conglomerate holding company and owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications.

In December 2015, Reliance Industries soft-launched Jio (Reliance Jio Infocomm Limited) and it crossed 8.3 million users as of January 2018.

Reliance is one of the most profitable companies in India and the second-largest publicly traded company in India by market capitalization. On 18 October 2007, Reliance Industries became the first Indian company to reach $100 billion market capitalization. It is also the highest income tax payer in the private sector in India.

how reliance industries makes money 2020

Hindustan Unilever (HUL)

hulHUL is one of the largest Fast Moving Consumer Goods (FMCG) Company in India with a heritage of over 80 years. It is a subsidiary of Unilever, a British Dutch Company. HUL’s products include foods, beverages, cleaning agents, personal care products, and water purifiers.

Few famous products of HUL are Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit.

hul company infographic

HDFC BANK

hdfc bankHDFC Bank is India’s leading banking and financial service company. It is India’s largest private sector lender by assets and has 84,325 employees (as of March 2017).

HDFC Bank provides a number of products and services which includes Wholesale banking, Retail banking, Treasury, Auto (car) Loans, Two Wheeler Loans, Personal Loans, Loan Against Property and Credit Cards. It is also the largest bank in India by market capitalization and was ranked 69th in 2016 BrandZ Top 100 Most Valuable Global Brands.

Asian Paints

Asian paint is one of the largest Indian paint company and manufacturer. Since its foundation in 1942, Asian paint has come a long way to become India’s leading and Asia’s fourth-largest paint company, with a turnover of Rs 170.85 billion. It operates in 19 countries and has 26 paint manufacturing facilities in the world, servicing consumers in over 65 countries.

Asian Paints is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home decor, bath fittings and providing of related services.

Tata Consultancy Services (TCS)

Tata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT) service, consulting and business solutions company. It was established in 1968 as a division of Tata Sons Limited. As of March 31, 2018, TCS employed 394,998 professionals.

TCS is one of the largest Indian companies by market capitalization (Rs 722,700 Crores as of June 2018). It is now placed among the most valuable IT services brands worldwide. TCS alone generates 70% dividends of its parent company, Tata Sons.

Infosys

infosysInfosys Limited is an Indian multinational corporation that provides business consulting, information technology and outsourcing services. It has its headquarters in Bengaluru, Karnataka, India. Infosys is the second-largest Indian IT company by 2017 and 596th largest public company in the world in terms of revenue. On April 19, 2018, its market capitalization was $37.32 billion.

Infosys main business includes software development, maintenance, and independent validation services to companies in finance, insurance, manufacturing and other domains. It had a total of 200,364 employees at the end of March 2017.

ITC

itcIndian Tobacco Company (ITC) is one of the biggest conglomerate company in India. ITC was formed in August 1910 under the name of Imperial Tobacco Company of India Limited. It has a diversified business which includes five segments: Fast-Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging, Agri-Business & Information Technology. Currently, ITC has over 25,000 employees.

As of 2016, ITC Ltd sells 81 percent of the cigarettes in India. Few of the major cigarette brands of ITC include Wills Navy Cut, Gold Flake Kings, Gold Flake Premium lights, Gold Flake Super Star, Insignia, India Kings etc.

Apart for the cigarette industry, few other well-known businesses of ITC are Aashirvaad, Mint-o, gum-o, B natural, Sunfeast, Candyman, Bingo!, Yippee!, Wills Lifestyle, John Players, Fiama Di Wills, Vivel, Essenza Di Wills, Superia, Engage, Classmate, PaperKraft etc.

ITC company infographic

Eicher Motors

Eicher Motors is an automobile manufacturer and parent company of Royal Enfield, a manufacturer of luxury motorcycles. Royal Enfield has made its distinctive motorcycles since 1901 which makes it the world’s oldest motorcycle brand in continuous production. Royal Enfield operates in over 40 countries around the world.

The Eicher Group has diversified business interests in design and development, manufacturing, and local and international marketing of trucks, buses, motorcycles, automotive gears, and components.

Bajaj Auto

bajaj autoBajaj Auto is a global two-wheeler and three-wheeler Indian manufacturing company. It manufactures and sells motorcycles, scooters and auto rickshaws. Bajaj Auto was founded by Jamnalal Bajaj in Rajasthan in the 1940s. It is the world’s sixth-largest manufacturer of motorcycles and the second-largest in India. 

A few of the popular motorcycle products of Bajaj Auto are Platina, Discover, Pulsar and Avenger and CT 100. In the three-wheeler segment, it is the world’s largest manufacturer and accounts for almost 84% of India’s three-wheeler exports.

Nestle India

nestleNestle India is a subsidiary of Nestle SA of Switzerland- which is the world’s largest food and beverage company. It was incorporated in the year 1956. Nestle India Ltd has 8 manufacturing facilities and 4 branch offices in India.  The Company has continuously focused its efforts to better understand the changing lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through its product offerings.

Few famous products of Nestle India are Maggi, Nescafe, KitKat, MUNCH, MILKY BAR, BARONE, NESTLE CLASSIC, ALPINO etc. (On 8 March 2018, Nestle Indias food brand MAGGI completed 35 years of existence in India.)

Also read: Market Capitalization Basics: Large cap, Mid cap & Small cap companies

Closing Thoughts

Most people invest in blue chip companies become of their long history of consistent performance and a similar expectation of standard performance in the future. Blue chip companies are low-risk high return bet for the long term.

Many blue chip companies in India like Tata, Reliance, Infosys etc are considered as ‘Too-big-to-fail’ companies as they have survived and remained profitable for a very long time. Nevertheless, this is not always true!!

Understanding Volume Profile for Technical Analysis

How to use Volume Profile while Trading? – Technical Analysis Basics

Understanding Volume Profile for Technical Analysis: In today’s day and age, the success of any movie depends on the number of people viewing it. If the movie has a large audience anticipating it, then we can be assured that it will have a large audience watching it and which in turn garners success for the movie. Here, the number/volume of the audience plays a very key role in the success of the movie.

Further, if we were to take the example of television series or any online series, its success is measured by the number of viewers. Game of Thrones (GoT) is a classic example of it. It has one of the largest numbers of viewership in online content history. Therefore, eventually, it all boils down to the volume or number of people watching.

Similarly, in trading also, the volume is the number of shares traded on a day to day basis. If there is no volume, then the price of shares won’t move. In short, volume plays a key role in deciding the movement. In this article, we are going to discuss what is Volume Profile, how is volume calculated, the correlation between volume and price, and the Correlation between Candlesticks, Supports & Resistances with Volume. Let’s get started.

What is Volume Profile?

In simple terms, volume simply signifies the number of shares traded of a particular company within a specified time. If a move in prices of shares happens with high volume then, it is considered to be more reliable. And the move can be expected to continue. But if the move happens on low volume, then the authenticity of the move is always questionable.

To confirm any pattern or to apply any technical indicator on the market, the Volume profile plays the most critical role. It plays an important role in confirming the trends or patterns in the market. It also plays a very big role in understanding the buyers’ or the seller’s perspectives. Without sizable volume, even the strongest of technical indicator or pattern might not hold much significance.

Quick note: Market Profile or MKTP is the synonym for volume profile. They are used interchangeably.

How is Volume calculated?

From the above explanation, we understood that Volume simply signifies the number of shares bought or sold within a specified time-frame. The more active the share is, the higher the volume and vice-versa.

For example, in the case of RIL, if for the price of Rs. 1,900, a total of 50 share been bought and 50 share being sold, then the volume here is 50 (and not 100). For the correct volume calculation, there has to be a buyer for every seller to complete a transaction. We should not consider the volume to be 100 (50 buys + 50 sell). Let us understand it with the help of an example:

How is Volume calculated?

So, from the table above, we can notice different buying and selling activities for the security for the different levels of time. The buyers and sellers meet to create volume for the share. And the cumulative volume is a summation of all the volume traded for the day.

The following tables show the volume change in the market for the most active securities on NSE with a time gap of 40 minutes.

The following tables show the volume change in the market for the most active securities on NSE with a time gap of 40 minutes.

Figure 1: Most active share at 11.42 am (21/07/2020, NSE India)

Figure 2: Most active share at 12.22 pm (21/07/2020, NSE India)

Now, if we were to compare to the tables above, we can see the volume table of most active security and the change in them with a gap of 40 minutes.

If we take the example of Bajaj Finance from Table, we see the change in price by Rs 8 (reduced) and the volume has increased by nearly 50% in 40 minutes. So, the move with this volume can be said to be genuine and not artificial. Any move with sizable volume helps the technical charts and indicators to take shape.

Correlation between Volume and Price

While trading with keeping volume in mind, the prior price and volume trend is of high significance. If the move happens, with the volume near its average volume or more than average volume, then that move holds more significance, than the move with thin or low volume.

Now, let us understand the correlation between volume and price with the help of the following table:

Correlation between Volume and Price

If the price increases with an increase in volume, then the expectation from the market is that the bullishness or strength is expected to continue. And if the same move were to happen with low volume, we can say that one needs to be cautious and be careful about forecasting the next move.

Similarly, if the price of the share reduces, with increased volume, we can expect the bearishness to sustain and continue. And if the same move happens on less volume, we need to be careful with the next leg of this move. And similar interpretation can be done for Rangy markets.

Participants on Low and High Volume days

If the market is trading with low volume, we can say that there is a lot of retail player’s participation in the market.

However, if the market is trading on high volume, we can say that there is a lot of institutional buying and selling in the market. Higher volume moves have better conviction and a higher chance of a continuation of the move, in the near future.

Correlation between Candlesticks, S&R and Volume

If the candlestick pattern gives certain trade patterns and if the signal were to come near the supports and Resistances and to top it off if the volume profile were aligned with the technical signals, then the trade can be said to have a very high probability of being successful.

In other words, a marriage of technical factors along with volume goes a long way in generating strong trading signals. Traders can benefit significantly from it if spotted at the right time.

Also read: Introduction to Candlesticks – Single Candlestick Patterns

Conclusion

Let us quickly conclude what we discussed in this article:

  • Volume is one of the most important indicators in understanding the trend of the market.
  • It provides a very strong impetus to our technical view on the market.
  • If the market is trading on low volume, we can say that retail traders are participating in the move.
  • If the price increases with an increase in volume, we can expect the bullishness or strength to continue (and vice versa).
  • And, if the market trades on high volume, it generally is a signal that institutional players are participating in the market

That’s all for this post on Volume Profile. I hope it was useful for you. If you have any doubts regarding volume while trading in stocks, feel free to comment below. I’ll be happy to help. Happy trading.

Why Ruchi Soya Share is Increasing_ +8,000% Within Six Months!

Why Ruchi Soya Share is Increasing? +8,000% Within Six Months!

Since the start of this year, the Ruchi Soya share is rising continuously. And this resulted in most of the share market investors asking the same question: Is there a Secret Sauce due to which Ruchi’s shares increased +8,000% within 6 months? Before diving deeper into this topic, let’s try to understand the scenario of Ruchi Soya’s current share price with the help of a few examples. 

All the four graphs depicting share price movements shown below are from various leading stocks trading across different industries in the Indian stock markets. Can you find any anomaly in the share price movement of the below-shown shares?

ruchi soya share vs different stock returns

Further, even if we look into the different companies in the FMCF sector, you can find one stock that is performing particularly irregular compared to others.

ruchi soya share vs FMCG stocks performance

It takes only seconds for our eye to catch the outlier in both, the share of Ruchi Soya Industries Ltd. But what is even more surprising is that the smooth and slick 8000% upward price movement of the stock is during the times of corona. Today, we have a closer look at Ruchi Soya Industries Ltd in order to provide an insight into what actually has led to the 8000% price increase.

Ruchi Soya Story till 2019

Ruchi Soya Industries Ltd. has been around for 34 years and is one of the largest manufacturers of edible oil in India. The shares of Ruchi Soya would be a dream stock prior to 2015 for any investor looking for dividends. This is because the company gave out dividends for 15 years consistently from 2001-2015.

Ruchi’s run, however, was cut short post-2015. The company made continuous losses in 2016,2017 and 2018. An extremely unhealthy sign for a company that has accumulated huge debt in its expansion goals. The huge debt of 12,000 crores forced Ruchi to enter the insolvency proceedings in December 2017.

— Post-Insolvency Performance of Ruchi Soya

The insolvency proceedings saw Ruchi being bid for. Here a portion of the amount bid would be used to pay off the debts and the remaining infused into Ruchi. Patanjali eventually won the bidding war against Adani. In December 2019 Patanjali completed the acquisition of Ruchi Soya with an Rs. 4350 crore resolution plan.

ruchi soya's financial performance

You may be wondering why would players take part in an aggressive bid war for a company that now had further deteriorated its sales and market grip by 2019. The answer to this lies in the already set up distribution channels and 3.3. Million tonnes per annum edible oil refining capacity in the 13 refining plants across the country. Five of these plants are port-based. The port-based refining plants are of huge significance as 70% of edible oil consumed in India is imported.

— Ruchi Soya’s Situation Post “Acquisition”

The shares of Ruchi Soya were delisted from November 2019 to 27th January 2020 due to the restructuring process. The restructuring process saw the dilution of the stake held by existing shareholders. Their shares were reduced 100:1. This can be described as a reverse stock split to understand better, where 100 shares held are now reduced to 1, but there was no Corporate Action. This was done in order to make way for Patanjali which now has an ownership of 99%.

Out of Patanjali’s total equity infusion, Rs450 crore was invested in exchange of preferential shares. Interestingly enough shares were also allotted to Ashav Advisory on a preferential basis in April. April was also the month where the shares of Ruchi Soya kept increasing from Rs.180 to Rs.413. The preference shares were allotted to Ashav Advisory at Rs.7 a piece in exchange for an Rs.1.87 crore investment after the company’s board approval.

Current Scenario of Ruchi Soya

Current Scenario of Ruchi Soya share

The shares of Ruchi Ltd. were relisted on January 27th. The shares opened at Rs.17 but since then have been a nightmare for investors trying to get in on the action. Shares of Ruchi saw a continuous 5% increase every day. This has triggered the circuit breakers every day leading to the trading suspension of the shares on a daily basis.

This carried on for over a 100 day period until the shares touched Rs. 706.95. This was followed by a steady fall to Rs 519.80 which seemed like a market correction in order to touch an equilibrium price. But post-May 27th the 5% per day rally began once again. As of 24th June, the shares of Ruchi Ltd. have touched Rs. 1378.40, an 8008% increase in the value since January.

“ RSIL’s liquidity position also remains adequate as on 9MFY20, considering the absence of fixed debt obligations during FY21, a low average collection period, and the availability of unencumbered liquid 1 assets of over Rs. 380 Cr for meeting its required working capital needs.”  Brickworth rating

Brickworth Rating agency assigned a stable outlook to the companies long term and short term borrowings this year.

Although the Preferential Shares allotment to Ashav Advisory is still pending due to Covid-19 they are still one of the biggest winners in the COVID-19 environment. Their 13 crore investment in April is now worth Rs.2577 crores 

Reasons behind the 8,000% increase

The parade of Ruchi Soya has investors wishing they could somehow be a part of. The following reasons give an insight as to what were the reasons for the 8000% price increase. They would also help an observing investor take a better stand when it comes to the shares of Ruchi Soya.

— Baba Ramdev’s Vision in FMCG Industry

Patanjali first disrupted the FMCG segment when they bought their ayurvedic alternatives to the shelf. The Ayurvedic product giant now aims at completely dominating the FMCG segment in India. This would mean that Patanjali would have to take other giants like HUL head-on.

HUL in the year 2018-19 has had sales crossing over 37000 crores. Ruchi would play a crucial role in achieving this. But Patanjali however does not only aim at beating current FMCG market leaders but is aimed at per annum sales of Rs. 100,000 crores in the next two years. Current market leaders like HUL, Nestle, Procter and Gamble, Britannia, and ITC in the 320,000 crore FMCG market get over 75% of their sales from the conventional distribution channels. Whereas Patanjali, on the other hand, receives 70% of its sales from its branded franchise outlets.

Patanjali has set a target of increasing the current 5000 distributors to 25000 distributors in the next 2 years in order to achieve their sales goals. Analysts have predicted that Patanjali can achieve their 1 lakh crore sales targets by expanding their retail reach alone. In addition, Ruchi, which is part of these goals has been debt-free ever since its acquisition by Patanjali. 

— Minuscule Public Shareholding and Lack of Share Supply.Ruchi Soya latest Public Shareholding and Lack of Share Supply

(Source: Latest Shareholding Pattern of Ruchi Soya)

Post the restructuring that took place after Patanjali’s acquisition reduced the shareholding with the public shareholders by 99%. Patanjali currently owns up to 99% of the equity shares with less than 1% remaining with the public shareholders. This means that only 28.59 lakh of the 29.59 crore shares of Patanjali are held by the public. This has created a situation where there is a huge demand for investors but the supply available of shareholders willing to sell is too low.shows the trading volumes of the shares of Ruchi Soya Industries Ltd

(The graph above shows the trading volumes of the shares of Ruchi Soya Industries Ltd. This shows the lack of significant trading volumes post-February 2020: Source

The huge increase in the share price has caused the market cap. of Ruchi to increase from Rs. 4350 crore when Patanjali bought it to 40,447.38 crores as of 24th July. Putting it at par with other giants like PNB, DLF, Cipla, etc.

This, however, raises the question as to how has Patanjali been able to legally hold 99% of the shareholding. This is because as per market regulations any majority stakeholder of a listed company cannot hold more than the permissible limit of 75%. Patanjali, however, is part of an exception as Ruchi Soya has just come out of the bankruptcy courts. Patanjali, however, has announced that they will be selling off 20-25% of their stake within the company over the next two years.

Closing Thoughts

The stocks of Ruchi Soya have been one of the biggest silver linings present in the Indian stock markets in the COVID-19 environment. But the question remains whether Ruchi will continue to be the diamond with demand exceeding the supply in the coming years. Investors after conclusively making a decision to get in will also have to decide the right time to do so.

The periods lie in either the current rally in order to be part of the Ramdev vision of which Ruchi is a part. Or to invest when Patanjali finally lets go of the 20-25% over the next 2 years when the supply will also be increased which in turn will affect the price. At the same time get an insight into role played and performance of Ruchi under Patanjali. Happy Investing!