India’s large cap companies’ have shown lesser volatility in different market cycles, but valuations have steadily moved up over these market cycles, making entry into Large Caps a considered decision. Large caps constitute about 70% of the entire market capitalization, and capture the essence and movement of the market. Known for their size, stability and sustainability, these companies help in creating value for the investor year after year with their profitability, cash flows, turnover and volume and continue to occupy space in in all equity funds. In our market, these are the bluechip companies
It is not frequently that Large Caps offer a reasonable valuation, as they do now. The reasons are:
- Firstly, the India Market cap to GDP ratio is down to about 75% from a high of 110%. Large caps have historically represented more than half of the market cap, making a strong case for investment at this value. We believe this is a good time to for a new large cap schemes to offer an attractive long-term investment opportunity. Investors seeking potential long term capital appreciation from their investment may consider participating in Mahindra Pragati Bluechip Yojana.
- Secondly, we can see that in our economy, which is growing at around 7.5-8% p.a. and where consumption is taking the lead, profits coming back rapidly in the large companies associated with Services, BFSI, IT, Healthcare, Metals, and Consumption. However, as we speak, the markets are nervous on account of political uncertainty. These large companies are earning rapidly but are not getting the value they deserve. We believe this could be the perfect time to invest in these large cap companies. However, not all the companies are seeing the same level of growth, so we think a tight portfolio may be initially better than an elaborate one.
What better way to invest than mutual funds? You can start a systematic investment or make a lumpsum investment in the Mahindra Pragati Bluechip Yojana. This fund will be investing at least 80% of its corpus in large cap equity stocks. Measure your stride with the market, progress with Mahindra Pragati Bluechip Yojana.
Mr. Ashutosh Bishnoi
MD & CEO