 "credit, credit card, retail credit, bank, nbfc, debit card")
Overall, the Nifty 50 has gained 18.30 per cent and the S&P BSE Sensex gained 17.22% per cent in the current year so far. The year has seen a rally in mid-and small-cap stocks and a historic number of IPOs. OmniScience Capital, a registered Investment Adviser with market regulator Sebi and small case manager, thinks banking, digital transformation, and rail infra are among the sectors that will play a vital role in the markets in 2023.
1) Banking and Finance: Omniscience believes there is a Rs 100 lakh crore opportunity in banking in India, which is catalyzed by spending in fintech and payments, rating agencies, enhancing digital banking, exchange systems, HFCs and NBCs. The opportunity includes several sub-growth vectors, providing stability and promise in this avenue for investors.
2) Digital Transformation:
The nation’s drive towards complete digital transformation is in full swing and is expected to carry the momentum forward in the next several years. Total expenditure is predicted to be divided among AI ($15 Trillion), Cloud infrastructure ($1 Trillion), 5G infrastructure ($13 Trillion), development of Metaverse ($5 Trillion), Internet Of Things ($19 Trillion) and Blockchain ($3 Trillion).
3) Power and Energy:
Power consumption is expected to reach 4 trillion units by the year 2030 at 13% CAGR. The Total Addressable Market (TAM) in Power is estimated to be a whopping 24 lakh crore, thus being one of the major drivers of India’s current growth. Avenues for investment include clean energy, generation and transmission, solar/hydro, resource and equipment manufacturing, and trading & exchange.
4) Railway Infrastructure:
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India plans to ramp up its railway infrastructure development to a new level in the coming years with various projects including the purchase of eight high-speed bullet trains, and the redevelopment of more than 1300 railway stations. The plan also expects to invest in 400 Vande Bharat Trains and 3000 new passenger trains in the next five years. Lastly, there will be progress in an ambitious Dedicated Freight Corridor of India targeting 45% of all freight in the country. These projects have created a total sector CAPEX opportunity of Rs 50 lakh crore in Railways.
5) Defence Sector Spending:
The Indian defence sector has spent a whopping $81 billion dollars in 2023, the fourth highest spending in the world. Defence exports touched a CAGR of 20 per cent to 84 countries. The expenditures range from purchasing submarines and torpedos, aircraft carriers, fighter jets, missiles, two defence corridors, 150 defence systems and radar systems, with 70 per cent domestic procurement. The opportunity presented is estimated to be a turnover of Rs 1.75 lakh crore by 2025 at a CAGR of 15 per cent.
6) Clean Energy for Mobility:
India is aspiring to control 30 per cent of the global market share in clean mobility by 2030. To meet this goal, there would have to be investments worth Rs 30 lakh crore. Of this, Rs 8 lakh crore is anticipated to be invested in green hydrogen, most likely the future of car fuel. In addition, the various avenues of investment include 2/3W Passenger Commercial EVs, New Battery Technology, development of charging infrastructure, and power storage technology.
Key events in 2024 that could impact the Indian markets
US Fed Rate cut between 0.75% to 2%: It may cause risk to trade thanks to a large flow of FII into Indian equities
1.5% to 2.5% rate cut by RBI → Could drive large economic growth and to large DII inflows.
Elections in India 2024 → Large fiscal and monetary allocations
Election in the USA 2024 → Will lead to favourable monetary and fiscal policies.
