India is in the midst of a massive infrastructure boom. Over the next 7 years, the country will spend $1.5 trillion on scheduled projects. In the history of the modern world, this ranks among the very largest investments in infrastructure ever.
Needless to say, this presents shrewd investors with plenty of great short- and long-term opportunities.
India’s infrastructure boom is being fueled by two irrefutable forces: capital and need.
The need is great. According to a Credit Suisse report, no city in India gets water for 24 hours a day. And during peak hours, power shortages are around 12%. Very bad.
The reason for the demand is obvious.
India’s population has gone from 400 million in 1960 to over 1.2 billion today. That’s 800 million more people wanting electricity, water, housing, roads, etc.
India currently has 42 cities with a population greater than 1 million.
An estimated 290 million people will move to the country’s urban areas by 2030, and 640 million are expected to make the move by 2050.
That means the number of Indian cities with a population of over 1 million could quadruple by 2050.
You can see the writing on the wall. The need and demand for infrastructure is huge. Yet the country’s current investment in it is very small. India spends just $41 per capita on infrastructure. (China, to get its infrastructure to where it is today, had to spend over $400 per capita.)
India knows it can’t bring its infrastructure up to par by itself. Not that it would even want to try. The Indian government is notorious for extensive delays and cost overruns.
So India is turning to the private sector. At least half of the $1.5 trillion that will be spent will come from individual companies and investment funds.
And that means dozens of multimillion- and billion-dollar opportunities for those companies and funds.
During China’s infrastructure boom 10 years ago, some companies saw four- and five-digit increases in their share prices. For example:
- A company that makes cranes, bulldozers, and asphalt pavers saw its share price rise 2,018%.
- An electricity provider and leader in China’s nuclear industry went from $0.16 per share to a current price of $37.50, for an astounding 23,462% gain.
Will these sorts of gains be possible in India?
Not quite. But the gains in India will still be significant. More important, investments in the companies doing the work won’t be as risky.
Investing in China back then was a crapshoot. That’s because most of China’s industrial companies were too small to do the work that was needed.
But India already has big, well-established companies. And with $1.5 trillion being spent, those big companies will get the bulk of the job orders.
We are not predicting four-digit gains. But we do foresee some very handsome three-figure returns with much greater certainty.
Tomorrow, we will show you one such opportunity.