India ETFs: The World’s Most Populous Nation
NIFTY 50 ETFs as India’s Benchmark
Breaking Down Exposure by Conglomerates and Consumer Stocks
India has overtaken China as the world’s most populous country. In equity markets as well, investor attention is increasingly shifting from China to India. A growing number of India-focused ETFs have been listed, and investment strategies are becoming more segmented—moving beyond broad benchmarks such as the NIFTY 50 to more targeted exposure to conglomerates and consumer sectors.
India operates two major stock exchanges: the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The flagship index of the NSE is the NIFTY 50, while the BSE’s benchmark is the SENSEX 30. In Korea, five ETFs track the NIFTY 50. KOSEF India Nifty 50 (Synthetic), TIGER India Nifty 50, and KODEX India Nifty 50 are passive index-tracking ETFs, while KODEX India Nifty 50 Leverage (Synthetic) and TIGER India Nifty 50 Leverage (Synthetic) offer 2x leveraged exposure.
The NIFTY 50 index, composed of 50 leading stocks, is heavily weighted toward financials at 34.44%, followed by oil & gas at 12.56% and IT at 12.52%. Top holdings include HDFC Bank, India’s leading private-sector bank; Reliance Industries, a diversified conglomerate spanning telecommunications, retail, and energy; and Infosys, a major IT consulting firm.
Over the past five years, the NIFTY 50 has delivered a cumulative return of 125.84%, outperforming the S&P 500 (85.41%) and the KOSPI (37.04%). Rising corporate earnings and growing participation by domestic retail investors point to a solid underlying foundation. That said, valuation levels are becoming a concern. Looking at the historical price-to-book (PBR) band over the past decade, the index is trading near 4.14x, close to historical highs. While earnings upgrades have helped ease concerns, a technical correction cannot be ruled out.
In May, two more specialized India-focused ETFs were listed: a Tata Group ETF (KODEX India Tata Group) and a consumer-focused ETF (TIGER India Billion Consumer). These products appear to be built on the investment narrative of India’s flagship conglomerates—akin to Korea’s Samsung Group—and the consumption potential of the world’s most populous nation. The KODEX India Tata Group ETF invests in the top ten Tata Group companies by market capitalization, with Tata Consultancy Services accounting for the largest weight at 26%, and exposure spanning IT, consumer goods, and infrastructure.
TIGER India Billion Consumer invests in 20 companies, including major automaker Mahindra & Mahindra, Hindustan Unilever—the Indian subsidiary of global consumer giant Unilever—and Tata Motors, which owns Korea’s Daewoo Commercial Vehicles and the UK’s Jaguar Land Rover.
Meanwhile, Korea Investment Management’s ACE ETF platform is reportedly preparing two active India ETFs for listing around September: ACE India Consumer Power Active and ACE India Market Leaders BIG5 Group Active, which will focus on five major conglomerates including Tata and Reliance.
India’s investment thesis rests on two main pillars. The first is its population, and the second is the ongoing reconfiguration of global manufacturing supply chains away from China. However, the once-optimistic projection that China’s GDP would surpass that of the United States has yet to materialize. Similarly, expectations that India’s growth will mirror China’s past trajectory should not remain vague optimism. As a still-emerging market, investing in India requires close attention not only to corporate earnings, but also to macroeconomic variables such as interest rates and credit risk.