The fantastic story that is Indian equity markets

The last 2 months have been pretty hectic for us at DistrictD,

as we,

              learn, and learn more everyday,

                  do, and do more day by day

            grow, and run from sprints to marathons

      and live and enjoy this fantastic new journey.

 

Continuing with the stream of thought from my previous posts about financial models, we have over the past 2 months scaled up the model count on our platform to now approximately 250 for Indian listed companies. We have studied each of their business models and understood the key drivers that investors would look at and prepared analyst models for each of these companies. As a result DistrictD now has models for more than 75% of the market capitalization of India. That means that our platform has models across the spectrum of Indian businesses from large sectors such as Banks, NBFCs, FMCG, IT to smaller sectors such as Rating Agencies, Diagnostic chains, Home building materials, Industrial Chemicals, Airlines etc.

Despite this we have only models for less than 20% of the listed companies in India. There are still many industries that are not covered even now and even many companies in the sectors that we have solved. This just goes on to show how large and vast the Indian equity markets are. Every few months new IPOs of very interesting companies come up. We are making it a habit of putting out models for IPO companies before the IPO – to allow investors to make their own unbiased decisions (after all one has to invest looking in mind the future and not the past performance as given in the prospectus). – This means the task is only getting tougher and bigger for us. But spare a thought for investors, who need to know, remember and process this ever increasing information pool.

Anyways getting back, the markets are only growing. Equity markets are the celebration of human entrepreneurship. If you are an equity investor, you are bullish on the efforts of entrepreneurs, their team and what they are building. Future is built when both these come together, the effort of the entrepreneur and the financial capital of the investor. If this is the thought then India’s dynamism is reflected in the markets and vice versa. Everyday we see news about a company doing something new, constant cycles of new creations and destruction of old ideas. This process is what keeps the markets alive. This is the dynamism that we love and cherish. More so since we ourselves are a part of this cycle. But what is true is that with every cycle the sum total is always greater than where it began from. That is how progress is made.

All the experience that we got from studying the 250 companies and various industries, showed us the vastness of the dynamism in Indian markets. I now see so many pockets, new ideas across big, medium and small sized companies. At the same time other pockets are there which are under constant threat of disruption, and yet some others which are looking to make a comeback. Indian market has opportunities in lending and allied industries, technology, infrastructure (despite all the negative sentiments around this space, there are enough of good infrastructure stories still available), manufacturing, entertainment, even commodities, the ever favourites in consumption, insurance, etc.

Globally few economies can boast of such dynamism. Only few examples come to my mind that offer such a variety for equity investors, as most other economies are either too outward looking with export dominated industries in natural resources (Brazil, Russia, Australia, OPEC block) or manufacturing hubs only (Taiwan, China etc) or struggling with internal growth issues (most of Europe). This dynamism and variety of ideas is what makes India the colorful place it is. On that note wishing you a Happy Holi!

PS – I have written much about investing, but DistrictD is not only about investing, it is also a whole lot of technology and rethinking of making things better and easier for investors. We have already built several tools for helping investors in their research and analysis and continue to build more. More on this aspect coming up soon.



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