Despite bearish reports and a lull in the market due to the pandemic, investments in certain sectors have created new billionaires and unicorns in 2020. “The current situation reminds me of the stock market mantra, “Be fearful when others are greedy and greedy when others are fearful”, and I think this is very much relevant in the scenario we face at present. One can argue that there could be lower lows yet in the indexes but there are plenty of opportunities at present and India remains one of the best destinations to invest in for the foreign institutional investors”, says Praveen Sinha Pincap MD
Sectors that will lead the revival for the Indian Economy
- E-Commerce and other digital services/startups – According to a Statista report from June 2020, India presently has the 2nd highest Internet consuming population at around 560 million users. This is only around 35% of the total population and we are on track to add another 100 million by the end of 2021. This is an extremely bullish signal for e-retailers, healthtech, edtech, and online aggregators, etc.
- Healthcare – The coronavirus has exposed the Indian healthcare system for all its fallacies and there will be major private and public investments into beefing up the trenches for a better future. Expect pharma, healthtech, insurance aggregators, research and testing labs, and supply manufacturers to continue to be safe havens for investors going forward.
- Supply Chain – With many major companies looking to shift bases from China and India a likely destination combined with the healthy growth of e-retail, the supply chain, and the logistics industry is an attractive sector for investments. “At Pincap, we have recently hired a seasoned industry expert Amit Pandey as our CEO to help us further identify and take advantage of the right opportunities in the market”, says Pincap MD Praveen Sinha. “In a personal capacity, I have also made investments into iKargos, online cargo management which is working towards streamlining international and domestic logistics and Omnipresent, a logistics company aiming to disrupt the industry using drone deliveries. Both teams are young and dynamic and are looking to solve critical issues that affect the supply chain.”, he added.
- Banking & Fintech – With the Indian Government continuing it’s an aggressive push to bring the unbanked into the organized financial fold, millions of new accounts will be opened every quarter for the foreseeable future helping the banks recover from the current slump. When demand returns into the market, the demand for credit will continue to grow and this is where the various fintech stakeholders will come into play.
- Real Estate – In the short term, there is likely to be a correction in the valuation of properties in the real estate business. With work from home becoming the norm, commercial property valuations and rentals have tanked to a certain extent. This will force commercial developers to start new models of renting like short leasing, co-working, etc. which could actually be a boon for space in the long run.
The work from home trend will create a demand for office furniture, as many will try to create an office-like environment at home. For homebuyers who have the capital, this is as good a time as any to invest in the home of your dreams with tempting valuations on offer combined with attractive financing deals.
“Outside the United States, China and India remain two of the key markets for profitable investments. We have a young population, fast internet adoption, and a middle class in which purchasing power parity is likely to improve over the coming decades. With the correct economic policy and decision making, India can emerge as the biggest alternative to companies looking to move out of China and set up shop elsewhere. We are already seeing the origins of this as several MNCs explore options to move production to India and hence, long term, the forecast for India Inc. continues to be bullish”, concludes Praveen Sinha.