Why should you invest in this smallcase?
The Indian auto industry is one of the largest in the world, accounting for ~7.5% of the country's GDP. During the FY2019-20 period, 2.6 crore automobiles were produced and 2.1 crore were sold in the country. India is also a prominent auto exporter. 47.65 lakh automobiles were exported during the FY2019-20 period. The auto component manufacturing industry accounts for 2.3% of India's GDP. Automobile components export from India is expected to reach US$ 80 billion by 2026, from the current level of US$ 7.35 billion. Sales of electric vehicles have also been on the rise. From just about 25,000 units in the FY2016-17 period, sales of electric vehicles have increased to 1,56,000 units in the FY2019-20 period.
A growing and aspirational middle class is driving the growth of the industry. Favorable policies by the govt. - like the Vehicle Scrappage Policy - will help boost demand for the sector. It is estimated that over 51 lakh vehicles, both private and commercial, are over 20 years old. As part of the scrappage policy, their removal from the roads will likely result in replacement demand for new vehicles.
This smallcase comprises automobiles, auto parts, batteries and tyre companies to allow investors to efficiently track and invest in the automobile sector.
Past Performance vs
Equity Large Cap
Mar 3, 2014
Note: Past performance graph includes changes due to rebalance, events like stock splits & mergers. Also, past performance doesn't guarantee future returns