Everyone knows that the Asian economy has been emerging for years due to the rise of globalization and worldwide trade. One of the hottest places to invest is the world’s second largest country, India. India’s population has tripled since it gained independence from the United Kingdom in 1947, and the growth isn’t slowing down- by 2030 India is expected to surpass China as the most populous country in the world. How can you take advantage of India’s growth to make a profit? Investing in Indian companies is a great start.
The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia. This is where the majority of Indian stocks are traded, over 5,000 companies are listed on the exchange with a total market capitalization in excess of US$1 trillion. The BSE SENSEX is made up of 30 of the largest and most actively traded companies in India, similar to the Dow Jones Industrial Average for US stocks. A great way for an investor to get started trading Indian stocks is to invest in some of these blue-chip companies. Below are five of the top BSE SENSEX stocks (all dollar amounts are USD):
Housing Development Finance Corporation Limited (BSE: 500010)
HDFC is a commercial real estate company founded in 1977 and located in Mumbai, India. Last year they had over $3.6 billion dollars in revenue resulting in an income of $922 million. HDFC’s net profit margin is north of 25%, showing that it isn’t only large, but efficient as well.
ITC Limited (BSE: 500875)
ITC is a conglomerate with four diverse business segments: paper goods, hotels, agribusiness, and fast moving consumer goods. Annual revenue is over $7 billion and ITC stock has a market capitalization of $33 billion. The company employes over 25,000 people and has a net profit margin of nearly 23%.
Tata Steel Limited (BSE: 500470)
Tata Steel is a multinational corporation headquartered in Mumbai, India. It is the tenth largest steel producing company in the world, with annual revenue exceeding $26 billion and total assets north of $30 billion. Steel is a major component in construction and with the worst of the global economic crisis seemingly behind us corporations and governments will be looking to move forward with new projects, especially in growing economies like India.
ICICI (Industrial Credit and Investment Corporation of India) Bank Ltd (BSE: 532174)
ICICI was founded in 1955 and headquartered in Mumbai, India. It is the second largest bank in India with total assets in excess of $119 billion. Last year the company had nearly $14 billion in revenue. ICICI has a presence in 19 countries and 80,000 employees worldwide.
Cipla Limited (BSE: 500087)
Cipla is an Indian pharmaceutical company whose products are distributed to over 180 countries. The company had a net income of over $200 million in 2011 off of revenue in excess of $1 billion, for a healthy net profit margin. Cipla may be best known by many worldwide for distributing low-cost anti-AIDS drugs to patients in developing countries.
