Last week, Govt. Of India has approved several initiatives to keep India on a robust growth path. One among is Smart City Mission. Under this mission, Govt. Of India would focus on making several cities as Smart Cities. Which are the stocks which would benefit from Rs 1 Lakh Crore Smart City Mission? Should you blindly buy such stocks that are expected to benefit from such Smart City Push? Are there any alternative investment options for investors to invest instead of buying these stocks directly?
What is Smart City Mission?
Govt. of India is pushing for development of 100 Smart Cities and implementing Atal Mission of Rejunevation and Urban Transformation of 500 Cities. This is Mr.Narendra Modi's most favorited project. Such development would provide an enormous amount of opportunities to several listed companies. Each selected city under the ambitious scheme would get Central assistance of Rs. 100 crore a year for five years. The mission aims to release funding depending on multi-pronged progress of the projects and makes citizen participation an integral part of the planning of these cities.Govt of India is expected to pump-in Rs 1 Lakh Crores (Approx) under this smart cities push and Atal mission. An investor can invest in such companies which would benefit from this Rs 1 Lakh Crore investment.
Which stocks would benefit from Rs 1 Lakh Crore Smart City Mission?
There are several industries like cement, infrastructure, Electrical and consumer goods manufacturing, paint are expected to benefit from such initiatives. Since this is huge spending, order books for such companies are expected to grow in coming years.
Stocks that would benefit in Cement Industry
Many companies like Ambuja Cement, ACC, Ultratech etc., which are large players in the cement industry are expected to have direct benefit from such smart city mission initiatives.
Infrastructure Companies that would benefit
Large players like LT&, Gammon, HCC, which has excellent, proven track record are expected to benefit from such missions. However, some of these stocks have reached new highs, hence one need to be careful before investing in such stocks.
Electrical and consumer goods manufacturing companies
Big players in this industry like Crompton Greaves, Bajaj Electricals, Havells India, etc., kind of companies can benefit from these smart city missions and Atal mission initiatives.
Paint companies that would benefit from this mission
While small players may have less impact, large paint companies like Asian Paints, Berger Paints, Kansoi Nerolac etc., may get benefited from such missions. Some of the stocks like Asian Paints has been growing consistently and has been providing steady returns year on year to investors which might be the best bet.
Should you invest in such stocks now?
In the last 1 year, SENSEX/NIFTY has been reaching new highs. In last 2-3 weeks, we are seeing some correction. This provides opportunity to enter in above stocks. One can accumulate such stocks over the period of 3-6 months during every correction to benefit in next 3 to 5 year period. One should note that stock market investments are high risk and even your capital can be eroded.
What are alternative investment options to invest and benefit from the Smart City Push Mission?
Direct stock market investments are high risk. If you want to benefit from such mission, but do not like to invest in such stocks, you can invest through top equity mutual funds. The majority of the equity mutual funds is already focusing on these missions and want to benefit out of it. You can also invest in Infra mutual funds like HDFC Infrastructure, ICICI Infrastructure funds, etc., to benefit from such stocks under Infra industry.
Conclusion: Smart City Push and Atal Mission initiatives provide good opportunities for companies and their order books is expected to improve drastically. Picking up large players in the industries that would benefit from such missions would help investors to gain. If you do not like direct stock investments, invest in top equity funds and relax.
If you like this article, please share this on your Facebook or Twitter. This would be a special gift which you would be giving to our blog.
Which stocks would benefit from Rs 1 Lakh Crore Smart City Mission