The India stock market could become the fifth largest stock market by 2024, according to CNBC. It will likely blitz past the United Kingdom value at over $5 trillion by that year. The value of the India stock market will encourage both local and global investors to invest in the market.
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India’s benchmark index, the NIFTY 50, represents the weighted average of 50 of the largest India companies listed on the National Stock Exchange. It represents the largest India companies and it reflects the stable growth of the India economy and positive future outlook.
You may also want to consider sticking with ETFs — more on that later.
Why Invest in India Stocks?
There are a wide variety of opportunities available in India, especially since the tech sector offers many options in start-ups and $10 billion in IPOs.
Active movement shifting toward India instead of China. It may even overtake China’s growth.
India’s growth rate is strong in its top economic sectors, including outsourcing and information technology. India’s growing economy and young population prepare well for a future of investing in the India markets.
Investing in India can offer more portfolio diversification. The low correlation of their markets with U.S. markets can offer ample diversification to your portfolio.
What are the risks? Currency risk could affect you when you buy between two countries, and it’s also important to remember that it’s in a tumultuous location, including Pakistan on its western border and China on its northern border. Furthermore, India’s institutions and infrastructure are still underdeveloped.
Tata Motors Ltd (NYSE: TTM)
Tata Motors Ltd., headquartered in Mumbai, India, is an automobile manufacturer with a portfolio that includes a range of cars, utility vehicles, trucks, buses and defense vehicles. It relates to the development, design, manufacture, assembly and sale of vehicles including vehicle financing through the sub-segments like Tata commercial vehicles, Tata passenger vehicles, Jaguar Land Rover, and vehicle financing.
India operations showed significant revenue improvement as compared to Q3 a year ago, however commodity inflation impacted the margins. As a result, TML reported EBIT of (1.7)% and pre-tax loss for Q3. PV business continued its turnaround journey and strengthened its double-digit market share with highest sales in any calendar year since inception. EV sales witnessed a new peak of 5,592 units in Q3.
The semiconductor supply situation is improving gradually whilst inflation worries persist. Over the last two years, the resilience of the business has improved and it is now intrinsically stronger. With concerted actions in place to address the near-term supply and cost challenges, the company expects performance to improve further in Q4 FY22 and beyond.
ICICI Bank Ltd. (NYSE: IBN)
ICICI Bank Ltd. invested in banking and financial services, including retail banking, corporate banking and treasury operations. It has retail banking, wholesale banking, treasury, other banking, life insurance, general insurance and others. This segment includes exposures of the bank, which satisfy the four qualifying criteria of regulatory retail portfolio as stipulated by the Reserve Bank of India guidelines on the Basel III framework. The wholesale banking segment deals with all advances to trusts, partnership firms, companies and statutory bodies. The “other” banking segment comprises leasing operations and other items.
For the quarter ended December 31, 2021, core operating profit grew by 25% year-on-year to $1.4 billion in the quarter ended December 31, 2021. Net interest income grew by 23% year-on-year profit after tax grew by 25% year-on-year to $833 million. Total deposits grew by 16% year-on-year to $136.9 billion by December 31, 2021.
State Bank of India (OTCMKTS: SBKFF)
State Bank of India is a multinational, public sector banking and financial services statutory body that uses technology to deliver and manage them in a personalized and customer-centric way. It operates through treasury, corporate/wholesale banking, retail banking, insurance business and other banking business. The treasury segment includes the investment portfolio and trading in foreign exchange contracts and derivative contracts. The corporate/wholesale banking segment has a corporate accounts group, commercial clients group and stressed assets resolution group that provides loans and transaction services to corporate and institutional clients and further include non-treasury operations of foreign offices. The retail banking segment comprises retail branches, including personal banking activities including lending activities to corporate customers and agency business and ATMs. The insurance business segment comprises the SBI Life Insurance and SBI General Insurance companies.
The bank has registered its highest quarterly net profit of Rs. 8,432 crores in Q3. This represents an increase of 62.27% year-over-year. The State Bank of India’s return on equity at the end of Q3 stands at 14.01% and net interest income increased by 6.48%.
Operating Profit increased by 6.86% and whole bank advances grew by 8.47%. Domestic advances growth stood at 6.47% driven by growth in personal retail advances — foreign office advances grew by 21.35% year-over-year.
Consider India Stocks
You could also consider buying exchange-traded funds (ETFs), which trade on the NYSE and the NASDAQ using a reputable brokerage. You may also want to consider investing directly in India’s stock market. You can do this by opening an account with an international broker regulated by the U.S. Securities and Exchange Commission (SEC) or with an India stock brokerage regulated by the India SEBI.
It’s true that currency risk and geopolitical risk are always present when you invest in companies in India (and in China, too). If you invest in ADRs, they can trigger various tax implications, which makes ETFs cheaper.