The Indian economy is gradually consolidating its position on the global stage. In
his Budget speech, Finance Minister P Chidambaram said that the country has the potential to become the seventh largest economy in the world by 2017, and the fifth largest by 2025. At present, it occupies the tenth slot.
As the economy grows in importance globally, Indian companies too will grow in size and reach, with an ever-increasing number likely to have large global presence and earn substantial revenues from overseas markets. The signs are already clear, with the likes of Tata Motors, Tata Steel and Hindalco earning over 60 per cent of their revenues from overseas markets.
The Boston Consulting Group, in its January 2013 report titled '2013 BCG Global Challengers' that identified 100 'global challenger' companies from the emerging markets, featured
20 Indian companies which it said are "growing so quickly overseas that they are reshaping industries and surpassing many traditional multinational companies."
The list includes companies from diverse sectors such as automobiles (Mahindra & Mahindra), telecom (Bharti Airtel), pharmaceuticals (Sun Pharmaceuticals), fastmoving consumer goods (Godrej Consumer Products) and information technology (Infosys). All of these are listed in India with substantial investor interest.
As an equity investor, how should you view this pack of Indian global companies? What are the factors that have a bearing on their businesses? Does buying these stocks provide stability to your investment portfolio?
Some of these Indian companies may be
good investment bets in the long run. However, as we point out, the mere fact that a company has large global operations does not by default make it a good investment pick. There are several instances where investors have lost, and quite heavily at times, by betting on stocks of some global Indian players.
An investor should be discerning and cautious even while considering inclusion of some of these blue-chips in the portfolio. In our cover package, we discuss issues common to global companies that you should be aware of while firming up your decision to invest in them.
The Union Budget had several announcements that have an impact on your wallet and your investments. These include slight modifications in personal income tax rules, sops on the housing front and the widening of the Rajiv Gandhi Equity Savings Scheme. In our detailed coverage of the budget from a personal finance angle, we tell you what the budget proposals mean for you as a salaried employee, an investor and a consumer.
We hope our coverage will help you to better organise your finances.
SARBAJEET K SEN
Executive Editor
