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Tata Capital > Blog > How you can take advantage of India’s digital wave

How you can take advantage of India’s digital wave

How you can take advantage of India’s digital wave

The past few years have been an exciting time for the IT industry in India. Over the decades gone by, an increasing number of companies in India’s business landscape embraced information technology and began to rely on IT-based solutions. Where a number of operational processes were carried out physically or manually earlier, the information technology introduced newer, faster and more efficient ways to achieve end goals.

India rapidly established itself as a leader in the IT sector, owing mostly to constant and consistent innovation with an added focus on digitizing products and processes. While the IT revolution was already underway prior to 2020, this year proved to be a kind of gamechanger for the digital industry. With the onset of the pandemic and the crisis it fueled, businesses were forced to adopt digital solutions at an accelerated pace, since contactless processes became the need of the hour.

Information technology leaders embraced the challenge and joined in on the rapid digitization that India’s businesses have seen this year. With so many exciting developments marking the IT sector, investors in the country, who were quite badly impacted by the initial market reaction to the crisis, began to turn to IT stocks to cash in on the digital wave that India is riding now.

If you’re on the fence about adding IT sector funds or stocks to your investment portfolio, you’ll be glad to note that there are several reasons why the IT sector offers lucrative investment opportunities at this juncture.

Additional Read: An overview of well performing industries in 2020

Here’s a closer look at why the IT sector funds make for a good addition to your portfolio.

Why add IT sector investments to your portfolio? 

India’s IT-BPM sector is among the fastest growing areas of the economic fabric. In 2019, the sector stood witnessed a year-on-year growth of 6.1%.[1] Here’s a closer look at some more reasons to make IT sector funds and stocks a part of your investment portfolio.

The global footprint of India’s IT-ITES sector

Indian IT firms have dominated the global space for years now. With delivery centers across the world and integrated solutions that are diversified across verticals like telecom, retail and BFSI, India reigns as one of the top digital capabilities hubs on a global scale, with around 75% of the world’s digital talent present in the country.

Rapid digital adoption

India’s IT-ITES sector also has another strength going for it - rapid digital adoption. In fact, India has emerged as the second-fastest adopter of digital solutions among 17 leading digital economies in the world, as the Country Digital Index reports. This pace of digitization suggests that the trajectory will continue to move upward in the coming years.

Additional Read: How can Wealth Management Adapt to the Digital Age?

Digital-first government initiatives

To further support the country’s IT-ITES fabric, the government has introduced several initiatives and programs like Digital India and Startup India, which serve the purpose of strengthening the digital transformation in the country and encouraging local startups to ride the digital wave too, thereby making it possible to meet the local demand for digital solutions smoothly.

COVID-19-induced accelerated IT growth

COVID-19 has proven to be the catalyst that spurred the accelerated digital growth in India in recent months. Digital adoption shot up in 2020, with the country clocking in around 100 million digital transactions each day - a five-fold jump from 2016.[4] Clearly, India’s IT sector has a ton of opportunities to tap into as it rides the digital wave.

Digital Mutual funds

How can you take advantage of India's digital wave?

Given all the reasons to consider adding IT sector assets to your investment portfolio, you may be wondering about how you can take advantage of India’s digital transformation and use it to earn good returns on investment.

  1. One way to do that would be to invest in IT sector stocks. But if direct equity is not your preferred investment choice, or if you’re a beginner who could use some professional expertise to manage your investments, IT sector funds would be a good choice to consider.
  1. These mutual funds invest in stocks of information technology companies who are pioneers in their field. Professionally managed by experts, they allow retail investors like you to invest in the best performing IT sector stocks in the market. Adding IT sector funds to your investment portfolio enables you to tap into the incredible opportunities that the global digital revolution brings along with it.

There are many mutual fund houses and AMCs that make it possible for investors to add IT sector funds to their portfolio. You can invest in the information technology sector in India with mutual funds that invest at least 80% of the net assets in equity/equity-related instruments of companies in the software, ITES and hardware sectors. Explore these funds today on Moneyfy App to check out how you can cash in on the digital revolution.

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