One important lesson every successful investor will suggest is to choose the companies which are Monopolies in their industry. Because monopolies will have higher market shares in their domain and are supposed to grow in the coming days when the need for their product increase. Here we discuss 10 Indian Monopoly companies which are a good choice for investing in stock markets.
History of the Stock market tells us that the companies that gave multiple times returns to the investors are Monopolies in their industry. also, we will see that the 10 Indian Monopoly companies we listed below are the ones that are moving the most in the stock markets.
Even the new industries which are Monopolies when goes for an IPO, we see from the IPO performance over the years that the Monopoly companies IPO’s are subscribed multiple times. This oversubscription results in the bumper listing when compared to the listing price of the IPO.
When you think about the companies that are listed in the stock markets, how many companies can you identify such that those companies are a monopoly in their industry? Very few companies are such that they captured the major share of the market.
Even Warren Buffet suggests the investors choose the monopolies to good returns in the long run. Monopolies have little or competition in the market making them a leader in the industry they are operating and hence can decide the details such as pricing and other details on their own without worrying about competitive advantage because of their price increase.
In investing however the stocks of these companies are known as MOAT stocks. A Moat is a hole that used to surround Medieval castles. This was done as a defence measure to make it harder for invaders to attack the castle. The wider and deeper is the moat, the more protected is the castle is. In the business world, these Moats are either barriers to entry like huge capital, government restrictions, or business advantage that a company has made it hard to compete with them.
The below are the 10 Indian monopoly companies
IRCTC – Market Share 100%
HAL- Market Share 100%
Nestle- Market Share 96.5%
Coal India- Market Share 82%
Hindustan Zinc- Market Share 78%
ITC- Market Share 77%
Marico for Oil Products- Market Share 73%
Pidilite – Market Share 70%
Concor – Market Share 68.52%
IRCTC – Monopoly in Industry
The first one in the list of 10 Indian Monopoly companies is the well known and popular Indian Railways. It is with no doubt that there is no competition now or in the future for the Indian Railways. The Industry completely is owned by the Indian railways and there is no chance for a private player to enter as of now. Even if the government allows some private players to enter into the industry, it is a huge investment involved one and takes decades to reach the position the Indian railways stand today.
The popularity of the Indian railways is visible right from it listing on the stock exchanges. On a listing day, the stock gave more than 100% returns to the investors and right from that time the stock is on the upward trend multiplying the wealth 5-6 times compared to the issue price of the Stock.
And with no doubt, the Transportation industry is going to grow in the coming days and with new areas being entered by the Indian railways the company will be growing in the future and being a monopoly in the industry there are no worries of competition in the industry and the Users in this industry have only one option that is the IRCT.
The second one in 10 Indian Monopoly companies is the Hindustan Aeronautics Limited. The state-owned Aircrafts manufacturing company under the Aviation ministry of the Central government. Today the company is state-owned and is associated with designing, fabricating, and assembling aircraft, jet engines, helicopters, and their spare parts.
The company is a monopoly in this business and occupies 100% market share because of its decades long Expertise and facilities developed.
The next in the list of 10 Indian Monopoly companies is the Popular Nestle. The Major Product of Nestle Cerelac has a market share of more than 96% making it the leader in the industry. Every family buys this for their newborn and the name of the Product “Cerelac” have a brand value across the country that is irreplaceable.
Nestle has spent more than a century in the Indian markets over the years has become an undisputed market leader in the baby food segment. It has an undisputed market share of 96.5% despite functioning in an open to all industry.
The next in the list of 10 Indian Monopoly companies is the State-owned Coal India Limited. The company is a monopoly in the coal industry with all the coal mines owned by the Ministry under the central government. The market share of the company is almost 82% making it a leader in the industry. Coal India is also the worlds largest Coal producing company. But the government has recently announced that it is exploring the ways to allow commercialize the industry and which might increase the competition to the Coal India in the coming future.
the next in the list of 10 Indian Monopoly companies is the Hindustan Zinc. The company has a market share of 78%. Today the company is a subsidiary of Vedanta Limited which owns a 64.9% stake in the Company while the Government of India holds a 29.5% minority stake.
The next one in the list 10 Indian Monopoly companies is probably the well known and well-discussed stock in the Investing community. The ITC company started as a Tobaccos company has monopolized the tobacco industry across the country. Thought the company has entered into FMCG business long back, the company is a monopoly in the Tobacco industry with no players that can dominate its position.
Marico for Oil Products
The next one in the list of 10 Indian Monopoly companies is the Marico company which is known for its OIL products. Marico is one of the well-known FMCG companies in India but the majority of its success lies in its two brands ‘Saffola’ and ‘Parachute’. The company has come a long way in the segment despite being around for only 3 decades. Safola which competes in the premium refined edible oil segment has maintained its market leadership with a share of 73%.
The next in the list of The 10 Indian Monopoly companies is the Pidilite Company. The stock have given already multiple times returns to the investors and still, the company is growing at a large. Pidilite’s product range includes adhesives and sealants (Fevicol and M-seal), construction and paint chemicals (Dr Fixit), automotive chemicals, industrial adhesives, and industrial & textile resins. It is the leader in the adhesive and industrial chemical market with a market share of 70%.
The next in the 10 Indian Monopoly companies is the Concor. Container Corporation of India Limited (CONCOR) is a Public Sector Undertaking managed by the Indian Ministry of Railways. Concor’s core businesses include that of cargo carrier; terminal operator, warehouse operator & MMLP operation. They hold a market share in domestic business of 68.52% in 2019-20.
The next in the list of 10 Indian Monopoly companies is the State-owned BHEL. BHEL is India’s largest engineering and manufacturing enterprise in the energy and infrastructure sectors and also a leading power equipment manufacturer globally. Its services and products range from power-thermal, hydro, gas. Nuclear and solar PV, transmission, transportation, defence & aerospace, oil & gas, and water.
10 Indian Monopoly Companies Bottom Line
Choosing a monopoly company gives an advantage of no existence competition and leader in the existing industry. Hence autonomous pricing and product decision exist for such companies and hence the company have to decide in a manner to benefit its shareholders and increase the revenue without the need to worry about any competition capturing the market.