The largest Indian conglomerates wrapped up in a smallcase
India has produced several businesses that have gone on to become so popular that their brands and products have become everyday names in many Indian households. From home and kitchen appliances and the tea/coffee that we drink every day to even the cars we drive, formidable business groups that are run by formidable businessmen are the reason behind their existence.
The sheer dominance of Indian business groups and their contribution to the growth of the Indian economy has been one that is enduring and robust. Business groups like Bajaj, Tata, Birla, Mahindra, etc have had a history of striving to be innovators and kept pace with the rapidly changing needs and preferences of the market, to stay relevant even in today’s times. They have also been at the forefront of technological adoption.
These businesses have consistently created value for their shareholders. A quick count of Nifty50 constituents reveals that about 20 of the 50 companies belong to family groups. These companies account for more than 50% of the market cap of Nifty 50 companies and belong to diverse sectors such as metals, auto, financial services, information technology etc.
Keeping the above aspects in mind, we decided to introduce smallcases based on different business groups. These smallcases will allow investors to track and invest in stocks of companies belonging to prominent business groups of India.
The 3 smallcases that are being launched are as follows:
House of Bajaj
The Bajaj group of companies was founded by Jamnalal Bajaj in 1926. The group’s core business is diversified across sectors such as auto, consumer finance, insurance, steel, consumer appliances, tours & travels, and industrials. 3 of the 7 listed companies of the group are part of the Nifty 50 index. Together these companies have a market cap of over ₹6.7 lakh crore.
The group owns marquee brands such as Pulsar and Avenger.
This smallcase is suitable for investors seeking to invest in blue-chip customer-facing companies.
House of Tata
Tata Group is an internationally recognized Indian conglomerate. It was founded in 1868 by Jamsetji Tata. The group has business interests in diverse sectors such as information technology (IT), automobiles, steel, chemicals, power production, consumer products etc. 4 companies in the smallcase are part of the Nifty50 and Nifty Next 50 index. These companies have a combined market cap in excess of ₹16 lakh crore.
The group operates in more than 100 countries across 6 continents. In 2019–20, the revenue of Tata companies, taken together, was ₹7.5 lakh crore. These companies collectively employ over 750,000 people. The group owns famous brands like Jaguar Land Rover, Tetley tea, Titan, Taj Hotels, Vistara, Westside etc., most of which are recognized around the world.
This smallcase is for investors seeking to hold a diversified group of profit-making companies, with a strong brand portfolio.
House of HDFC
The Housing Development Finance Corp was founded in 1977 as the first specialised mortgage company in India. Since then the HDFC group has grown to become a large and well respected financial conglomerate with a presence across housing finance, banking, insurance, asset management, student loan and real estate-focused private equity fund. 3 of the 4 listed entities of the group are part of the Nifty50 index. The combined market cap of the listed entities of the group exceeds ₹14.7 lakh crore.
As of March 2021, the outstanding loan portfolio of HDFC was 2.5x the loan portfolio of the next biggest player in the housing finance market. HDFC Bank has the largest asset base amongst all private banks and stands 2nd in terms of total assets amongst all banks in India. The group has 6000+ branches and service centres across India.
This smallcase is suitable for investors seeking to gain exposure to fast-growing and reliable blue-chip companies in the financial services sector.
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