For a long time, India’s Information Technology (IT) sector has been a major driver of the country’s economy and the segment got another leg up after the outbreak of the Covid-19 pandemic in March 2020.
Upgrading or incorporating new technology is one of the fastest ways to stimulate growth and make a business more competitive. Covid proved to be a boon in disguise for tech companies looking to expand their footprints more aggressively. With new tech start up listings in our country, India has emerged as the third largest start up ecosystem in the world after the US and China and the pace of growth is showing no signs of slowing down. In the past year, India has added three unicorns every month, taking the total number to 51, ahead of the UK (32) and Germany (18). IT spending in India is projected to reach US$ 93 billion in 2021 (a 7.3% year-on-year growth) and reach US$ 98.5 billion in 2022 – Source: McKinsey Report
The COVID-19 crisis has brought years of change in the way companies across all sectors and sectors do business. According to a new McKinsey Global survey of executives, their companies have accelerated the digitization of their customer and supply-chain interactions and their internal operations by three to four years. And the share of digitally or digitally enabled products in their portfolio has grown surprisingly fast in the last seven years.
Under the Digital India initiative, implementation of initiatives like Aadhaar, UPI and DigiLocker ensuring faceless, cashless and paperless transactions has laid the foundation for a strong, robust and secure Digital India.
The pandemic has come as a boon for some businesses and is wreaking havoc for others. Stocks such as Facebook, Amazon, Apple, Netflix and Google, or more popularly known as FAANG stocks, performed extremely well due to the lockdown and work-from-home norms. Video conferencing tool Zoom became the go-to app for interacting with colleagues and families in this pandemic. Reflecting this trend, technology sector funds in India have given more than 90% returns in the last one year till September 2021.
One of the best tech funds in this space is Digital Fund, which primarily invests in equity/equity related instruments of companies in the Information Technology (IT) sector in India- Software, IT, Hardware and New Age listed Start-ups. Up. Sector funds are suitable for investors who have advanced knowledge of macro trends and prefer to make selective bets for higher returns than other equity funds.
Views are personal: The author is Ritesh Kale, Director, Nagpur from Big Bull Capital Services Pvt Ltd
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