What is Monopoly Stock?
Monopoly competition is when there is little to no market competition since only one provider is present.
Businesses with minimal to no competition typically own monopoly stocks. These companies usually dominate their respective markets and are the only or largest players in them.
Businesses with monopolies control their industry and have an advantage over rivals. Because they regularly offer high-quality goods and services, they frequently have the biggest market capitalization.
Is It good to be a monopoly business?
Consumers continue to use a specific company’s products or services because it controls the market in a monopolistically competitive market. There are numerous ways for businesses to create monopolies in their particular industry. Laws, distribution limitations, and significant technology barriers are a few.
Due to the high cost of switching, consumers usually stick with a brand’s products, helping the company establish a monopoly.
On the stock market, a wide range of enterprises and industries are represented. Yet not every company is the same or works in the same sector.
Monopoly businesses have little to no competition and control their respective marketplaces.
The top Monopoly Stocks in India will be examined in this blog, along with the value of investing in these companies. Continue reading to learn more about it.
10 Best Monopoly Stock in India for 2023: A Guide
Despite the fact that the company has grown to be a conglomerate during the last century. In spite of this, India’s cigarette business still has a healthy 77% of the market. This might be attributed to the business’s expertise in the field and willingness to provide goods that cater to the shifting tastes of diverse customer groups.
The brand benefits from a national supply chain and distribution network in addition to industry experience.
Currently Share of ITC trading at Rs 284 and in this one-year ITC has given 70% return (from Feb 2022). This share still holds lot of potential and its one of the favourite shares for Indian investors.
2. Coal India – 82%
Next in list is Coal India Ltd. that mines and refines coal. Moreover, it is the world’s largest coal producer. The Union government of India owns it, and the Ministry of Coal is in charge of managing it.
82% of India’s total coal production is contributed by the corporation. Yet, the government did not begin allowing commercial mining in the coal sector until this year, possibly indicating the end of its monopoly.
Coal India share is not only a Govt owned monopoly company but it is also one of the best shares to invest. Company has given approximately 30% return in one year (from Feb 2022).
3. IRCTC – 100%
The only company operating in the Indian markets is IRCTC, a state-owned organisation. Due to the lack of competition for consumers, it becomes a monopoly. The business was established in 1845.
In addition to being one of the largest railroads in the world, it employs many people. In general, rail networks are regarded as “Natural Monopolies.” This is so that the rack may only be utilised by one train at a time.
Yet, by allowing private parties to compete for train lines, nations like the UK have drawn in new participants. India has made the announcement to open the market to players earlier this year.
4. Nestle India – 96%
Nestle was established in Switzerland in 1866 and is now regarded as one of the top businesses in the world for nutrition, health, and wellbeing.
It has been sold in Indian markets for more than a century and has made a name for itself as the undisputed market leader in the infant food sector.
Nestle’s Cerelac brand of quick cereal is intended as a breast milk substitute for infants 6 months and older. One of the top companies in the world for nutrition, health, and wellbeing is Nestle.
Over the years, it has spent more than a century in Indian marketplaces and has established itself as the indisputable market leader in the infant food industry. While operating in a competitive business, it enjoys an indisputable market share of 96.5%.
Currently Stock is trading around Rs 18800.
5. Hindustan Zinc – 78%
Hindustan Zinc Ltd., the second-largest zinc-lead miner in the world, holds a 78% market share in India’s primary zinc industry. In 1966, the company was founded as a government-sponsored project by the Metal Corporation of India.
Currently, the business is a division of Vedanta Ltd, which owns a 64.9% share while the Indian government holds the remaining 29.5%.
6. HAL (Hindustan Aeronautics Ltd) – 100%
The Hindustan Aeronautics India Limited is a key player in the Indian defence industry and represents the country’s aviation industry. In order to produce aeroplanes in India, Walchand Hirachand and the government of Mysore founded the firm in 1940.
Now a state-owned business, it is involved in the design, manufacture, and assembly of aeroplanes, jet engines, helicopters, and their replacement parts.
7. Marico – Oil Product – 73%
One of the well-known FMCG firms in India is Marico, but its two most successful brands are Saffola and Parachute. Although only being in the market for three decades, the company has made significant progress in this field. With a 73% market share, Safola, a competitor in the premium refined edible oil sector, has maintained its dominance. Conversely, “Parachute” has a 59% market share. Up to 90% of their income comes from this as well.
8. Pidilite Industries – 70%
Adhesives and sealants (Fevicol and M-seal), construction and paint chemicals (Dr. Fixit), automotive chemicals, industrial adhesives, and industrial & textile resins are among the products offered by Pidilite. With a 70% market share, it dominates the industrial chemical and adhesive business.
9. Container Corporation of India (CONCOR)- 68%
The Indian Ministry of Railways oversees Container Company of India Ltd (CONCOR), a public sector undertaking. The business was founded in 1966 with the intention of containerizing national cargo transportation. Cargo carriers, terminal operators, warehouse operators, and MMLP activities are among Concor’s primary businesses. In 2019–20, they have a 68.52% market share in domestic trade.
The largest engineering and manufacturing company in India and a top producer of power equipment on a global scale are both part of BHEL. Power-thermal, hydro, and gas are among its services and products. Transmission, transportation, defence & aerospace, oil & gas, nuclear, solar PV, and water. Also, it has the single-largest market share in India’s industry for emission control equipment.
In this article we talked about the list of Monopoly stocks in India that have dominated the market. Monopoly or huge Moat stocks are like a gold mine for value investors. This is due to the fact that if one can identify an appropriate Moat stock to invest in, they offer substantial returns over the long term. But, as with other Blue-Chip businesses, these stocks are typically overvalued and might result in reduced returns or losses, so investors must exercise caution.
Tell us in the comments which other Indian businesses hold a significant monopoly in their sector.
Disclaimer: This article is not a investment advise and some of stock prices mentioned in post are from the date article was posted/updated.