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Experts often suggest blue chip investment options. But for beginners, the name blue chip may be slightly confusing. After reading this article, you will get clarity on what are blue chip stocks and why you may want to invest in them.  

If stock markets are the oceans of wealth, blue chip stocks are the blue whales of the ocean. Blue whales, according to National Geographic, can be as massive as 100-foot-long creatures that weigh more than 200 tonnes. But what blue chip stock means in simple language according to the AMFI classification is any stock among the top 100 companies listed on bourses are large-caps or blue chips. 

What are the traits of large-cap or blue-chip stocks?

  1. Large scale operations
  2. Massive market capitalisation
  3. Stable businesses 
  4. Strong balance sheet
  5. Long history of existence
  6. Experienced and diverse management 

After reading about their traits, do you think investing in blue chip stocks might be less risky as compared to investing in lesser-known companies run by less diverse boards? Navigating through the universe of large-caps will help you understand their texture more accurately. 

List of blue chips stocks listed in India

Company NameMarket cap (Rs crore)FY23 Revenue (Rs crore)FY23 Net profit (Rs crore)
Reliance Industries Ltd.16,40,340 8,76,396 74,088 
Tata Consultancy Services Ltd.13,41,774 2,25,458 42,303 
HDFC Bank Ltd.12,43,204 1,70,754 46,149 
ICICI Bank Ltd.7,11,413 1,21,067 35,461 
Infosys Ltd.6,12,272 1,46,767 24,108 
Hindustan Unilever Ltd.5,87,233 60,580 10,143 
Bharti Airtel Ltd.5,82,682 1,39,145 12,287 
ITC Ltd.5,65,774 70,919 19,477 
State Bank of India5,46,989 3,50,845 57,750 
Life Insurance Corporation of India4,96,829 7,81,543 36,397 
Larsen & Toubro Ltd.4,59,374 1,83,341 12,531 
Bajaj Finance Ltd.4,52,637 41,398 11,508 
HCL Technologies Ltd.3,73,075 1,01,456 14,845 
Kotak Mahindra Bank Ltd.3,62,456 42,151 14,925 
Axis Bank Ltd.3,47,153 87,448 10,919 
Adani Enterprises Ltd.3,25,926 1,36,978 2,422 
Titan Company Ltd.3,17,295 40,575 3,274 
Maruti Suzuki India Ltd.3,12,614 1,17,571 8,211 
Asian Paints Ltd.3,09,696 34,489 4,195 
JSW Steel Ltd.2,98,732 1,65,960 4,139 
Sun Pharmaceutical Industries Ltd.2,92,563 43,886 8,513 
UltraTech Cement Ltd.2,84,821 63,240 5,073 
NTPC Ltd.2,74,852 1,76,207 17,121 
Bajaj Finserv Ltd.2,72,573 82,072 12,210 
Avenue Supermarts Ltd.2,63,111 42,840 2,378 
Tata Motors Ltd.2,62,073 3,45,967 2,690 
Oil & Natural Gas Corporation Ltd.2,45,630 6,32,291 32,778 
Nestle India Ltd.2,40,991 16,897 2,391 
Adani Green Energy Ltd.2,35,371 7,792 973 
Adani Ports and Special Economic Zone Ltd.2,23,952 20,852 5,393 
Wipro Ltd.2,20,442 90,488 11,366 
Coal India Ltd.2,15,757 1,38,252 28,125 
Power Grid Corporation of India Ltd.2,15,356 45,581 15,417 
Mahindra & Mahindra Ltd.2,03,360 1,21,269 11,374 
Hindustan Aeronautics Ltd.1,82,442 26,928 5,811 
Bajaj Auto Ltd.1,77,131 36,455 6,060 
LTIMindtree Ltd.1,70,557 33,183 4,410 
Indian Oil Corporation Ltd.1,65,925 8,41,756 11,704 
DLF Ltd.1,64,546 5,695 2,034 
Tata Steel Ltd.1,60,173 2,43,353 8,075 
HDFC Life Insurance Company Ltd.1,49,933 70,207 1,368 
SBI Life Insurance Company Ltd.1,48,272 80,636 1,721 
Varun Beverages Ltd.1,40,770 13,173 1,550 
Grasim Industries Ltd.1,37,494 1,17,627 11,078 
Siemens Ltd.1,37,316 17,965 1,911 
Pidilite Industries Ltd.1,32,742 11,799 1,289 
Adani Energy Solutions Ltd.1,23,028 13,293 1,281 
Adani Total Gas Ltd.1,22,728 4,378 546 
Tech Mahindra Ltd.1,19,708 53,290 4,857 
Hindalco Industries Ltd.1,18,709 2,23,202 10,097 
Britannia Industries Ltd.1,18,077 16,301 2,316 
Bharat Electronics Ltd.1,17,870 17,734 2,986 
IndusInd Bank Ltd.1,16,861 36,368 7,390 
InterGlobe Aviation Ltd.1,12,889 54,446 -317 
Bank of Baroda1,11,107 94,139 15,005 
Eicher Motors Ltd.1,08,566 14,442 2,914 
Godrej Consumer Products Ltd.1,06,469 13,316 1,702 
Tata Power Co. Ltd.1,05,622 55,109 3,810 
Shree Cement Ltd.1,03,325 17,852 1,269 
Trent Ltd.1,02,329 8,242 394 
Zomato Ltd.1,01,656 7,079 -971 
Ambuja Cements Ltd.1,00,265 38,937 3,024 
ABB India Ltd.99,918 8,568 1,016 
Chola Investment and Finance Company Ltd.98,466 12,884 2,665 
Dabur India Ltd.97,409 11,530 1,701 
Bharat Petroleum Corporation Ltd.97,345 4,73,187 2,131 
Punjab National Bank97,084 86,845 3,359 
Divi's Laboratories Ltd.96,896 7,768 1,823 
Cipla Ltd.96,838 22,753 2,833 
Dr. Reddy's Laboratories Ltd.92,489 24,670 4,507 
TVS Motor Company Ltd.92,122 31,974 1,309 
Vedanta Ltd.91,704 1,47,308 14,503 
GAIL (India) Ltd.91,558 1,45,668 5,596 
Tata Consumer Products Ltd.88,191 13,783 1,320 
Bajaj Holdings & Investment Ltd.86,561 522 4,946 
Havells India Ltd.83,621 16,911 1,072 
Canara Bank80,720 85,885 11,345 
ICICI Prudential Life Insurance Company Ltd.79,201 49,404 813 
Apollo Hospitals Enterprise Ltd.78,118 16,612 844 
United Spirits Ltd.76,350 10,612 1,126 
Jindal Steel & Power Ltd.76,027 53,212 3,974 
Hero MotoCorp Ltd.75,162 34,158 2,800 
Shriram Finance Ltd.74,878 30,492 6,020 
SBI Cards and Payment Services Ltd.71,785 13,670 2,258 
ICICI Lombard General Insurance Company Ltd.71,366 17,876 1,729 
SRF Ltd.70,533 14,870 2,162 
Marico Ltd.69,901 9,764 1,322 
Torrent Pharmaceuticals Ltd.69,188 9,620 1,245 
Berger Paints India Ltd.66,952 10,568 860 
Bosch Ltd.64,537 14,929 1,424 
Samvardhana Motherson International Ltd.64,512 78,701 1,670 
Zydus Lifesciences Ltd.64,356 17,237 2,092 
Colgate Palmolive (India) Ltd.63,163 5,226 1,047 
Info Edge (India) Ltd.61,985 2,346 -71 
IRCTC Ltd.61,756 3,541 1,006 
Muthoot Finance Ltd.58,400 10,515 3,474 
P & G Hygiene & Health Care Ltd.55,112 3,918 678 
PI Industries Ltd.52,722 6,492 1,230 
Adani Wilmar Ltd.48,413 58,185 582 
UPL Ltd.44,830 53,576 4,414 

Data as on 11th December 2023

(Source: ACE Equity)

Two indices — BSE 100 and Nifty 100 — best capture the movement of India’s largest 100 companies. The Indian large cap space is dominated by financials and IT which together accounted for 44.4% of Nifty 100 as of 30th November 2023. (Source: NSE)

India’s blue chip club isn’t homogeneous. Companies such as HDFC Bank, Reliance Industries, ICICI Bank, TCS and Infosys are some of the largest of the large companies listed in India in terms of market cap as well as annual profits. Moreover, it’s noteworthy that only 3 out of 100 companies reported losses in the financial year of 2022-23. 

How has the historical performance of blue chip stocks been?

Nifty 100 was launched in December 2005 with a base date of January 2003 and a base value of 1,000. In December 2023, the index traded above 21,000. In other words, the index has multiplied investors’ wealth 21 times over the last 21 years—which translates to a CAGR return of approximately 16%. 

All these factors suggest that if you want to invest in Indian equities, it’s imperative to invest in blue chips. Their weightage in your portfolio may vary depending on your risk appetite and time horizon. The ideal time horizon for investing in blue chips is 3 years or more. Large-caps are suitable for investors with a high-risk appetite. 

Advantages of investing in blue chip stocks

  1. Nifty 100 stocks account for 69% of the free-float market cap of stocks listed on NSE
  2. Large cap companies help you create a solid foundation for your equity portfolio
  3. Large cap companies have strong financial muscle to withstand adversity
  4. Strong business fundamentals equip blue chips to tackle fierce competition
  5. Blue chip stocks are highly liquid and can be converted into cash quickly

How do I invest in blue chips?

You can buy shares of blue chip companies and hold them in your Demat account. If you still don’t have a Demat account, you may think of opening one with Ventura Securities. 

Just in case you don’t want to invest in blue chip stocks directly, you may think of adding a blue chip mutual fund scheme to your portfolio. A flexi-cap fund or a multi-cap fund also has a significant large-cap exposure. 

In brief

Like blue whales, blue chip stocks can surprise you with their size, competitiveness and financial might. If you want to invest in equity markets, you must hold at least some blue chip stocks in your portfolio. For mutual fund investors, a large cap fund can be a good alternative to buying blue chip stocks directly. 

Do you invest in blue chips? If yes, which stock do you own? How much do they account for in your portfolio? Do share your response in the comments.


Disclaimer:
The blog is for information purposes only and anything mentioned herein shouldn’t be construed as a fundamental reason to buy/hold/sell any stock. Furthermore, the information provided in the blog and observations made therefrom shouldn’t be treated as the extension of recommendations made on the other properties of Ventura Securities. If you follow any research recommendations made by our fundamental or technical experts, you should also read associated risk factors and disclaimers.
We strongly suggest you consult your financial advisor before making any decision pertaining to your finances. Asset allocation becomes extremely relevant.
We, Ventura Securities Ltd, (SEBI Registration Number INH000001634) its Analysts & Associates with regard to the blog article hereby solemnly declare & disclose that:
 We do not have any financial interest of any nature in the company. We do not individually or collectively hold 1% or more of the securities of the company. We do not have any other material conflict of interest in the company. We do not act as a market maker in the securities of the company. We do not have any directorships or other material relationships with the company.
We do not have any personal interests in the securities of the company. We do not have any past significant relationships with the company such as Investment Banking or other advisory assignments or intermediary relationships. We are not responsible for the risk associated with the investment/disinvestment decision made on the basis of this blog article.

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