New smallcase Launch – Niveshaay Consumer Trends Portfolio

Why are we bullish on the Indian Consumption Story?

India is a consumption driven story. What works in India’s favor on the private consumption front is the size of its consumer base, the rising income, and the aspirations of its young population, which is the largest in the world. As for investments, with the size and scale of operations it has to offer to global companies, the availability of skill and talent, and technology and innovation capabilities, India continues to be an attractive investment destination. India can rely on its own domestic demand to firepower its growth, specifically, private consumption (accounts 60% of its GDP) and investment spending. What adds an intriguing dimension is the convergence of both these favorable conditions.

The government’s emphasis on substantial capital expenditure, encouraging higher private capital spending, creates a multiplier effect on the economy by generating employment, boosting per capita income, and ultimately driving consumption demand. Additionally, India has reached a crucial inflection point, surpassing a GDP per capita of $2500. Historical examples from countries like the United States in the 1950s/60s, Germany in the 1960s, Japan in the 1970s, South Korea in the 1980s, and more recently, China in the 2000s, indicating accelerated consumption, particularly in discretionary spending.

Here, are the Key trends we are observing in India:

1. The total number of Demat accounts in India surged from 3.5 crore in FY19 to 12.7 crore as of August 23.
2. The number of High-Net-Worth Individuals (HNIs) in India, currently standing at 8 lakh (with assets valued above $1 million), is anticipated to double over the next 4-5 years.
3. India’s luxury market is expected to grow 3.5 times the current size to reach $200 billion by 2030, according to a report by global consulting firm Bain & Co.
4. India has experienced a significant uptick in the import of Swiss watches, reaching Rs. 1,722.88 crore, marking a growth of 19.6% from the Rs. 1,438.84 crore recorded in 2021. Projections indicate an anticipated more than doubling of this figure in the next 4-5 years. The Swiss Watch Industry report identifies India as the next significant growth market for the watch industry.

Why have we launched a New smallcase?

In response to these trends, we’ve devised a smallcase to capitalize on Indian consumption trends, a long term defensive structural play.

This thematic portfolio is curated to include companies that stand to benefit from prevailing consumption trends. It is tailored for investors seeking opportunities with a 3–5-year investment horizon and who are comfortable with mid to high-risk category investments.

The portfolio predominantly comprises major players from the mid and small-cap segments.

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NIVESHAAY INVESTMENT ADVISORS•SEBI Registration No: INA000017541

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