Infrastructure, State Firms’ Stocks Win Big in India After Polls

(Bloomberg) -- Shares of Indian state-run companies and infrastructure-related firms were a standout on Monday after exit polls predicted a landslide victory for Prime Minister Narendra Modi’s ruling party.

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While votes will be counted on Tuesday, an index of 54 stocks, which CLSA termed as “Modi Stocks” last week on the assumption that policy continuity will benefit them, surged 6.2% on Monday. In comparison, the benchmark NSE Nifty 50 Index jumped 3.3% to an all-time high.

Citigroup Inc. and Jefferies Financial Group Inc. said manufacturing and electric vehicles are among the other sectors that would benefit if exit polls translate into a similar actual result for the Bharatiya Janata Party-led alliance. In the bond and currency markets, traders are putting focus on the government’s finances and the budget that will likely be announced next month.

Read more: India Stocks Hit Record, Rupee Gains as Polls Predict Modi Win

“We expect the government to retain focus on infrastructure, manufacturing, energy and electric vehicles through reforms, budgetary allocations, and policy incentives,” Citi strategists including Surendra Goyal wrote in a note. “Stocks positively exposed to the focus on infrastructure and manufacturing growth would gain.”

Here are some of the key outperformers in India’s market on Monday:


The Nifty Infrastructure index rose 5.5%, the most since April 2020, with GAIL India Ltd. the top gainer.

Modi touted his administration’s performance on infrastructure during election rallies and his party’s manifesto promised more investments in modernizing India’s road, rail and metro connectivity. His government in its annual budget in February announced the country’s largest-ever capital expenditure of 11.11 trillion rupees ($134 billion), a jump of more than threefold from five years ago.

State-Run Firms

A gauge of state-owned companies on the BSE jumped 7.7% to register its best day since October 2017, with Power Finance Corp. Ltd. shares among the biggest winners.

A strong mandate for Modi on Tuesday “should also benefit” state-owned companies’ stocks, with a push likely toward disinvestments, according to Citi.

Read: Modi Frees India’s Sprawling State Companies to Chase Profits

Adani Group

Billionaire Gautam Adani’s ports-to-power conglomerate led the rally in the Indian stock market as businesses that are closely aligned with Modi’s infrastructure push are expected to flourish if he returns for another five years.

The market value of Adani group companies swelled by about $20 billion on Monday, with Adani Power Ltd., Adani Ports and Special Economic Zone Ltd. and flagship Adani Enterprise Ltd. among the top contributors.

Adani Group Stocks Surge, With Power Unit Leading the Rally

Renewable Energy

Power sector stocks saw strong gains with NTPC Ltd. leading the way. Stocks in the renewable energy space such as Suzlon Energy Ltd, Inox Wind Energy Ltd. and Waree Renewable Technologies Ltd. rallied by their daily limit of 5%.

Renewable energy has been a key focus of Modi’s second term with the prime minister laying down India’s goals to become a carbon-neutral nation by 2070 in the COP Summit three years ago. India plans to produce 500GW of renewable energy by 2030 as it looks to lower its reliance on fossil fuels.

--With assistance from Malavika Kaur Makol and Subhadip Sircar.

(Updates with closing stock prices.)

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