In this piece, we will take a look at the ten best companies to invest in India for beginners. For more companies, head on over to 5 Best Companies to Invest in India for Beginners.
India is one of the largest countries in the world when it comes to the economy and the second largest when it comes to population. This lends it unique advantages and enables the companies that operate in the country to grow massively as they have a large population at their disposal to sell products and services. India’s stock exchanges are also among some of the largest in the world. The primary exchange in the Asian country is the National Stock Exchange (NSE) which is based in India’s financial center and one of the most lucrative cities in the world, Mumbai. The NSE is the world’s eighth largest stock exchange in terms of market value as of September 2022, as its total market capitalization stood at $3.3 trillion. Additionally, it was ranked as the fourth largest exchange in the world in 2021 in terms of cash equities traded. A total of $164 billion worth of equities were traded on the NSE in September 2022, placing its rank at number 11.
While the NSE is among the top ten exchanges in the world when it comes to the total number of companies that are listed on it, the ranking drops as it is reflective of a broader trend in India where firms generally do not turn to the broader stock market to raise capital through public finance. A total of 2,126 companies had been listed on the NSE in September this year, placing it below all major Asian Pacific exchanges including those in China, Australia, and Japan.
However, the NSE is not the only major Indian stock exchange, with the other being the BSE which is also the oldest stock exchange in India as it was set up in 1875. Out of the two, the NSE is more technologically advanced while the BSE is larger when it comes to the total number of companies listed. A stark contrast between the two is that the BSE continued to rely on paper trades until as recently as 1995, while the NSE was set up with electronic trading as its foundation in 1992.
Moving towards the Indian economy, it was worth a massive $11.6 trillion in 2022, making it the third largest in the world in terms of purchasing power parity, with only the United States of America and the People’s Republic of China surpassing it. Services accounted for the majority of the economy, with a 54% share. However, unemployment stood at a painful 7.7%, and the bulk of the labor force was employed in agriculture. Manufacturers fueled India’s $421 billion worth of exports during the fiscal year 2022, but the country nevertheless ran a $39 billion current account deficit. The U.S. was India’s largest trading partner and the country also had $547 billion in foreign exchange reserves, which were the fifth largest in the world and more than sufficient to fund both its imports and its current account deficit for more than a year, lending it stable credit rating. India did however runs a larger public sector debt of $2.9 trillion and had a gross external debt of $617 billion as of June 2022.
In today’s piece, we will focus on a handful of Indian companies, some of which also list their American Depository Receipts (ADRs) on U.S. stock exchanges. Out of these, the top picks are Reliance Industries Limited (NSE:RELIANCE.NS), Tata Consultancy Services Limited (NSE:TCS.NS), and HDFC Bank Limited (NYSE:HDB).
Photo by Smartworks Coworking on Unsplash
Our Methodology
We took a look at the countless Indian firms that trade on the NSE and U.S. exchanges to narrow down those whose share prices are relatively stable and might be suitable for the current turbulent environment. Technology companies have been avoided, and banks and energy firms have been preferred, and the list is sorted according to market capitalization in U.S. dollar terms.
Best Companies to Invest in India for Beginners
10. Larsen & Toubro Limited (NSE:LT.NS)
Market Capitalization as of December 5, 2022: $35.7 billion (1INR = 0.012USD)
Larsen & Toubro Limited (NSE:LT.NS) is a Mumbai based firm that offers engineering and construction services to several different industries. These include the oil and gas sector, to which the firm provides turnkey solutions for coal and gas thermal power plants. Additionally, Larsen & Toubro Limited (NSE:LT.NS) also serves the needs of the defense sector, alongside providing engineering equipment to the fertilizer and nuclear industries.
Crucially, Larsen & Toubro Limited (NSE:LT.NS) is also an international player that provides turnkey solutions to the power industries in several different countries including the UAE, Qatar, Kuwait, Malaysia, Saudi Arabia, and Thailand. Its subsidiaries also operate in the financial world, in the form of mutual funds and financial holdings. The firm raked in Rs 519 billion in revenue during its second fiscal quarter of 2023, to mark for 23% annual growth.
Larsen & Toubro Limited (NSE:LT.NS)’s latest market capitalization is $35.7 billion.
Along with Tata Consultancy Services Limited (NSE:TCS.NS), Reliance Industries Limited (NSE:RELIANCE.NS), and HDFC Bank Limited (NYSE:HDB), Larsen & Toubro Limited (NSE:LT.NS) is a strong Indian stock.
9. Adani Total Gas Limited (NSE:ATGL.NS)
Market Capitalization as of December 5, 2022: $49.3 billion (1INR = 0.012USD)
Adani Total Gas Limited (NSE:ATGL.NS) is a natural gas company that is headquartered in Ahmadabad. The firm sells pipeline natural gas to commercial and residential customers and compressed natural gas for automotive use. It has hundreds of filling stations all over India.
For the first half of the fiscal year 2023, Adani Total Gas Limited (NSE:ATGL.NS) added 33 new CNG stations to its portfolio, enabling it to operate 369 stations all over India. During the same time period, the firm added 61,000 additional customers to its pipeline business. Adani Total Gas Limited (NSE:ATGL.NS)’s operational revenue stood at Rs 23 billion for the first fiscal half, and this narrowed down to Rs 2.77 billion in profit after tax. The company is also aiming to set up a 1,500 electric vehicle charger network across India, in key locations such as airports.
As of December 5th, 2022, Adani Total Gas Limited (NSE:ATGL.NS) had a market capitalization of $49.3 billion.
8. ITC Limited (NSE:ITC.NS)
Market Capitalization as of December 5, 2022: $50.8 billion (1INR = 0.012USD)
ITC Limited (NSE:ITC.NS) is one of the oldest companies in India that was set up in 1910. The firm is headquartered in Kolkata, and it is a diversified business that operates in the fast moving consumer goods (FMCG), hospitality, agriculture, and information technology industries, among others.
ITC Limited (NSE:ITC.NS)’s quarter that ended in September 2022 saw the firm grow its revenue by 27% annually, with the hospitality segment powering growth by returning to pre pandemic levels and boosting its revenues by 82% year on year. However, ITC Limited (NSE:ITC.NS)’s agriculture business was the star of the show as it leveraged a global commodity crisis to grow wheat, rice, and leaf tobacco exports. This enabled the agriculture segment to post a 44% annual revenue growth.
ITC Limited (NSE:ITC.NS)’s latest market capitalization is $50.8 billion.
7. Bharti Airtel Limited (NSE:BHARTIARTL.NS)
Market Capitalization as of December 5, 2022: $60.2 billion (1INR = 0.012USD)
Bharti Airtel Limited (NSE:BHARTIARTL.NS) is a telecommunication company that is headquartered in New Delhi. The firm provides services to close to 500 million customers in more than 15 countries. Its services include voice, data, wireless internet, broadband internet, and mobile commerce.
Bharti Airtel Limited (NSE:BHARTIARTL.NS)’s large customer base makes it one of the biggest telecommunications companies in the world. In fact, as of September 2022, the firm was the second largest mobile carrier in the world, coming second only to China Mobile. Bharti Airtel Limited (NSE:BHARTIARTL.NS) raked in Rs 4.2 billion in revenue during its fiscal year 2022, and its assets stood at Rs 363 billion.
Bharti Airtel Limited (NSE:BHARTIARTL.NS) has a $60.2 billion market capitalization.
6. State Bank of India (NSE:SBIN.NS)
Market Capitalization as of December 5, 2022: $65.9 billion (1INR = 0.012USD)
State Bank of India (NSE:SBIN.NS) is a regional Indian bank that is one of the oldest companies in the country since it was set up in 1806. The bank provides personal banking services such as savings and current accounts; a variety of loans such as home, auto, education, and gold loans; and corporate banking services such as working capital finance and term loans.
The State Bank of India (NSE:SBIN.NS) traces its roots to the Imperial Bank of India, which was the Indian central bank during British rule. The bank raked in a whopping $52 billion in revenue in 2022, which translated into $5.5 billion of net income. Its largest shareholder is the Reserve Bank of India or the Indian central bank. The State Bank of India (NSE:SBIN.NS) also has a diverse global presence. It operates in 36 different countries such as Canada, China, Australia, Sri Lanka, and Nepal. Additionally, the bank also dabbles in capital markets, the insurance industry, and the mutual fund sector.
The State Bank of India (NSE:SBIN.NS)’s market capitalization as of December 5th, 2022 stood at $65.9 billion, and its total assets stood at $694 billion as of 2021 end, making it one of the 100 largest banks in the world.
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Disclosure: None. 10 Best Companies to Invest in India for Beginners is originally published on Insider Monkey.