This huge amount of investment every month means, the market has the great capacity to march forward with a great passion. Investors opened new 26 Lakhs (2.6 Million) SIP accounts in September 2021. Besides SIP, launch of new fund offers (NFOs) and up move in stocks also boosted inflows of this huge money into the markets. NFO (New Fund Offers) is a first time subscription offer for a new scheme that has been launched by an Asset Management Company. Once the NFO is over, the fund will reopen for subscription again and investors have the option to subscribe at the prevailing Net Asset Value (NAV). In September 2021, 5 NFOs alone collected around Rs.6,580 Crores
Let us take an example of a companies which turned their market capital to Rs.10,000 Crores. Navin Fluorine International Limited market capital has risen 147% to 12,303 Crores in 2020. Current Market Capital of the company as of October 2021 even raised and it is Rs.16,624 Crores. This means with the amount of SIP flowing into the Indian stock market every month, a company like Navin Fluorine can be started every month. In 1 year, the company has given 100% return considering the all-time high of 4,212.75
When compounding this 10,000 Crores SIP every month at the rate of 18% CAGR, Nifty and Indian companies has a great growth in coming years. It would not be surprising me if Nifty reach 25,000 or more by end of December 2022 with this much amount of money flowing into Indian stock market. The secret for Indian investors would be to buy on dip and hold firmly atleast for 1 year to get abundance wealth
It is more evident that the money inflow into the stock market will only increase going forward than the money outflow. When the SIP method is attracting more money into the market, it is stable and will happen for atleast a year or so. In addition to that, there will also be high investments flowing into the market considering the growth
Few other activities around Rs.10,000 Crores investments are
Auto Sector: India launched its National Automobile Scrappage Policy in August 2021. This policy would attract the fresh investment worth Rs.10,000 Crores towards the development of scrapping infrastructure. Union Minister Nitin Gadkari also told, car makers may be urged to offer 5% concession to those producing a scrappage certificate of an old vehicle. This also generates more jobs in the auto and scrapping industry
Tata Motors is setting up a Registered Vehicle Scrapping Facility (RVSF) in Ahmedabad to recycle up to 36,000 vehicles a year. An MoU for the same was signed with the Gujarat government. Improved sales globally will fetch spill over benefits for the Centre and states in terms of GST earning of Rs.40,000 - Rs.50,000 Crores for the Centre and Rs.30,000 - Rs.40,000 Crores for the State
- Vodafone Idea Promotors will be investing Rs.10,000 Crores in the company. This was assured to the government by the promotors, Vodafone Plc and Aditya Birla Group
- Berger Paint India eyes to make a turnover of Rs.10,000 Crores in FY24
- Aditya Birla Group firm Hindalco Industries planning to invest Rs.8,000 - Rs.10,000 Crores in Hirakud, Silvassa and Mundra Plants
- RBI (Reserve Bank of India) stated that, Small Finance Banks (SFB) get Rs.10,000 Crores facility for lending Small Businesses
There are companies who are trying to increase their production, revenue and profits. With so much of activities going around the big businesses in India, it is evident that the stock market will grow going forward. The only and toughest job to be followed by investors is to identify the quality companies and stay invested for atleast next 5 years with patience.
Disclaimer: This blog is for informational and educational purpose. This is not an investing or trading idea. Consult your financial advisor before investing.
Have a Great Day
B G Nareshkumar
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