The Most Diversified Companies in Indian Stock Market….!!
Diversification is one of the most important parts of portfolio management or investing. It is always advisable to never put all the eggs in one basket. The simple principle is applied to Investing too. If a person invests all its investment in one company, stock or an asset, then the odds of loss in that particular investment is close to 100%. If the stock or asset loses its value so does its investment value. By investing in different companies, assets, or securities, one can easily reduce their risk and increase their chances of a better return. As we know the risk is directly proportional to return. But one of the most important things to note is that every asset class has different types of risk and return characteristics. One can equally balance between risk and return to achieve their financial goals. An investor can hold a mix of investment of stocks, bonds, assets, and physical metals. But one should first assess each of their risks and returns as well as the overall impact on the portfolio. Different types of securities outperform during different times of economic cycles. For example, Debt or fixed income securities outperforms other asset classes in the bear market, while equity outperforms fixed income during the bull market. So, one should take note of that, whether the market is in bear cycles or bull cycles before investment.
But generally, it is seen that the equity market outperforms other markets in the long term. An investor who strictly wants to invest in equity, then there are also options for reducing the risk through diversification within the equity. Share market is always composed of companies with varying sizes, different industries and sectors. But apart from that, there are also individual companies with a wide variety of businesses and revenue streams that can help in achieving portfolio diversification. They are mainly large multinational corporations with tens of billions of dollar revenues. Due to multiple revenue streams from diverse sectors, these companies are considered to be very solid stock market performers and immune to the impact of swings in the share price. Investors who invest in these stocks are quite aware of the potential of the company and their historical records. Let’s look at some of the most diversified companies in the stock market, according to economic times.
It is one of India’s topmost private sector companies. It has a presence over diverse sectors like Cigarettes, Hotels, Paperboards, Agribusiness, Information Technology, Packaged Foods, and other FMCG Products. It was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India and changed its name to ITC in the year 1974. It continues to invest in diverse business segments. The de-risking strategy of the company has added enormously to shareholder value over the years.
- Reliance Industries:
Reliance is one of the biggest names in Indian Industries. The company has business operations in diverse domains apart from its core business of petrochemical and textiles. It is led by Mukesh Ambani and is expected to continue with his diversification sprees such as telecom, power generation, fertilizer, and retail. They have great expertise in opening a business of a newer future and become a dominant player within a few years. Reliance Jio is one of the best examples. It is currently focusing on expanding its retail and apparel business.
- Tata Consultancy Services:
It is one of the leading global IT services, consulting, and business solutions organizations. It is an Indian multinational IT services company headquartered in Mumbai. It is one of the subsidiaries of Tata Group and operates in 149 locations across 46 countries. It offers their expertise in the field of IT infrastructure services, business process outsourcing services, engineering, and industrial services, global consulting, and asset leveraged solutions.
- Hindustan Unilever:
The company was incorporated on 17th October 1933. It is one of the big names in Fast-moving consumer goods. It has four business segments such as home care personal care foods and refreshments, soaps, and detergents as well as beverages products such as tea and coffee. Its product can be found commonly in Indian households.
- HDFC Bank LTD.
HDFC is one of India’s premier banks ltd. It was founded in the year 1977 as the first specialized mortgage company having headquarter in Mumbai. It has a presence in banking, life insurance, general insurance and asset management, and venture capital.
*Disclaimer: investment in securities market are subject to market risks, read all the related documents carefully before investing