Ways to Invest in India
In May 2009, the stock market of India and companies of India surged when the Indian National Congress party won a re-election to form a government. This was a surprise landslide victory and is viewed as pro-business and pro-economy. The Bombay Stock Exchange (BSE) went up by 25 percent, which many thought was too high too fast, yet it continues higher.
As a result of the election and an end to the uncertainty, India could become the least riskiest growth market of the emerging markets. Reserve Bank of India Governor Duvvuri Subbarao recently said that India’s only modest dependence on exports would certainly help their economy weather the current global economic problems. That along with the fact that India’s financial system had virtually no exposure to the so-called toxic assets such as the failed mortgages that many of the world’s banks are holding. There are several ways to invest in Indian stocks and the expected growth of India.
You can diversify your investments in India to limit risk and to capture the overall increase in the Indian economy by investing in these exchange-traded funds (ETF) or exchange-traded notes (ETN).
- iPath MSCI India Index (IIP)
- Powershares India ETF (PIN)
- WisdomTree India Earnings (EPI)
- iShares MSCI India Index Fund (INDA)
- iShares S&P India Nifty 50 Index (INDY)
Companies in India
There are numerous large companies in India you can invest in to capture India’s growth, which you can buy on the United States stock exchanges.
Infosys Technologies (INFY) is probably one of the most popular and heavily traded companies in India. They are an information technology (IT) company that also sells software to the banking industry.
HDFC Bank Ltd (HDB) located in Mumbai has over 11 million customers with 760 branches.
ICICI Bank (IBN) has commercial banking for both retail and commercial clients and includes insurance and asset management.
Tata Motors (TTM) is an auto manufacturer of both passenger and commercial vehicles including the financing of their products.
Dr. Reddy’s Laboratories (RDY) manufactures bulk drugs and conducts research in areas such as cancer drugs. At this time the company mainly markets their medicines to India but is branching out to other countries and is also working with the National Cancer Institute in the US.
Patni Computer Systems (PTI) offers information technology including application software, infrastructure management, and product engineering and quality assurance services.
Wipro Ltd (WIT) has several areas of business including information technology services, IT products and consumer care and lighting products.
Reliance Industries Ltd is India’s largest private enterprise. Their business is in the energy and material sectors and is a Fortune Global 500 company. 40 percent of the investors in India own Shares of Reliance Industries. You can buy shares of this company through the Luxembourg exchange in the form of Global Depository Receipts (GDR).
You can also buy these closed-end mutual funds that invest in the companies of India.
India Fund Inc (IFN) is a closed-end fund that invests in the stocks of Indian companies across a wide range of industries.
Morgan Stanley India Investment Fund (IIF) is another closed-end fund that invests in the stocks of Indian companies and also will at times invest in currency and options.
There are other large companies in India you could buy, but for those you would have to buy them on the Bombay Stock Exchange (BSE). To do this you would have to consider the foreign currency differences. A better way to invest in India and its companies would be through the above funds and the individual companies you can buy on the major exchanges. The growth prospects of India are exciting for investors looking to invest globally.
© 2009 Sam Montana