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QUOTE
Forbes magazine says in its second annual survey of India's top 40 companies that "foreigners can be forgiven for forgetting it, but there is more to India's economy than information technology outsourcing," adding, "it is dominated by banking, energy and manufacturing groups."
Making a strong pitch for investing in Indian equity vis-à-vis the Chinese market, the Forbes survey says that India's clear advantages are its democracy, rule of law, English language fluency and half of its population being under 25. Other advantages — it's a "natural ally" of the US, while America's "relationship with China will at best be wary and tense." Also, while China's state-owned companies have "staying power," government ownership was bound to limit their growth and potential.
But while the investment opportunities in India are tremendous, investors needed to "tread very carefully at this stage," as the companies were not exactly cheap. Even though not all that expensive at these levels, at around 18 times earnings, "the market is not especially cheap anymore either. But that doesn't mean it's too late to get involved. The recent correction was long overdue and healthy. Fundamentally, India's top companies are as strong as ever."
Interestingly, India has 27 billionaires, against only 10 of China, and the 40 richest Indians have a collective net worth of $106 billion against the 40 richest Chinese with a collective net worth of only $61 billion.
