- Equity Portfolio Manager
Skip to main content
- Insights
- Capabilities
- Funds
- Sustainability
- About Us
- My Account
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Many industries across India remain highly fragmented. However, a trend that has become more visible in India over the past several years under Prime Minister Narendra Modi’s administration is that of industry consolidation, which has streamlined the number of companies operating within each sector.
I see this as a largely positive development that presents opportunities from which some equity investors can (and should) seek to benefit.
The reasons for the increased industry consolidation are many. In the past, many sectors in India could have been typecast as “small-scale industries,” populated by mostly inefficient, uneconomical companies that did not generate the anticipated levels of employment. The Indian government has come to realize that size and scale matter in today’s world. Thus, it has forged ahead to attract large-scale manufacturing to the country using subsidies and other means. The most notable and successful example of this is that iPhones, including the iPhone 14, are currently being made (“assembled” is the correct word) in India. In fact, India has been the world’s second-largest maker of smartphones of all types for a few years now.
The change in the Indian government’s mindset is most apparent in existing businesses and sectors. The government has been a key facilitator of consolidation, either by design or by default. There seems to be a growing recognition that Indian companies need to get bigger to stay relevant and competitive globally. While the government has not explicitly articulated any such policy, I believe its actions on this front speak for themselves. Here are some examples of what I’m talking about.
Industry consolidation has been gaining considerable traction in India. All in all, I expect to see a lot more of it happening in the coming years, which should generally be good news for investors as consolidation of legacy, mostly family-run businesses into larger enterprises boosts market share, operating leverage, and profit margins for publicly traded companies in India. I believe these conditions offer equity investors an opportunity to benefit from positive change across a variety of industries in one of the world’s fastest-developing nations.
Expert
Impact investing in emerging markets: Growing opportunities, shifting challenges
Continue reading4 equity themes: Budding opportunities in small caps and more
Continue readingURL References
Related Insights
Stay up to date with the latest market insights and our point of view.
Small-cap stocks: Watching for mean reversion, technology diffusion, and the next inflection point
Our experts discuss factors that could help small-cap stocks rebound and the search for winners in this inefficient segment of the market.
European elections: all change for equity investors?
Macro Strategist Nicolas Wylenzek discusses how the elections for the European Parliament could herald significant change, with major implications for European equity investors.
Weekly Market Update
What do you need to know about the markets this week? Tune in to Paul Skinner's weekly market update for the lowdown on where the markets are and what investors should keep their eye on this week.
Beyond the hype: finding AI’s long-term winners
Our expert argues that a long-term mindset based on deep research can help to uncover evolving AI investment opportunities amid the hype.
Impact investing in emerging markets: Growing opportunities, shifting challenges
Members of our impact bond team discuss their evolving emerging markets opportunity set and the importance of a bottom-up approach to value creation.
4 equity themes: Budding opportunities in small caps and more
Starkly different policy agendas from Biden and Trump are examined in terms of how they may affect the supply side of the US economy.
Three ways social considerations can enhance portfolios
Four leading Wellington equity and fixed income experts explore three ways social considerations can enhance portfolios.
Picking the right building blocks for a climate-aware portfolio
For asset owners integrating climate change into their multi-asset portfolios, members of our Investment Strategy & Solutions Group offer five important insights.
Financial Market Review
A monthly update on equity, fixed income, currency, and commodity markets.
Monthly Market Snapshot — March 2024
A monthly update on equity, fixed income, currency, and commodity markets.
URL References
Related Insights
Japan equity: Reason to believe
Our expert argues that corporate governance reform and the Japanese economy's escape from persistent deflation have laid the groundwork for a sustainable equity rally.
By
Toshiki Izumi, CFA, CMA