Own a Piece of India’s Storied Family Enterprises with Business Conglomerate Funds

By Jitendra Sriram, Senior Fund Manager - Equity, Baroda BNP Paribas Mutual Fund

Have you long admired India’s storied business houses like the Tatas, Birla’s, Bajaj, Mahindra, or Godrej? Or do you follow post-independence tycoon families such as the Jindal’s, Adani’s, or Ambani’s and dream of owning a stake in their vast empires?

For most retail investors, buying even a single share across all the group companies of these conglomerates is no small feat. The sheer number of listed firms under each fold demands a significant capital outlay. Add to that the challenge of deciding which specific businesses will thrive among the many sectors they operate in, and the task becomes daunting.

The Answer: Business Conglomerate Funds

Business Conglomerate Funds may offer a smarter, affordable route to owning a slice of India’s biggest business families. These mutual fund schemes invest in conglomerates with operations across multiple sectors of the economy.

Managed by seasoned fund managers and backed by research analysts, these funds handpick the prime performers among a conglomerate’s listed entities. The result is a focused yet diversified portfolio designed to capture the wealth creation potential of India’s corporate giants – all at a pocket-friendly entry point.

Why this category of MFs is gaining Popularity

A major catalyst is the surge in value unlocking through demergers and restructuring. Such moves allow conglomerates to list or sell specific business lines, often leading to a “sum of the parts” valuation greater than the whole.

Recent examples include:

• ITC demerging its hotels business into a separate entity

• Raymond spinning off its lifestyle division

• Hindustan Unilever separating its Kwality Walls ice cream unit

Family settlements and strategic splits have also driven clearer ownership, sharper focus, and faster growth in constituent businesses. Additionally, cash raised from selling non-core assets gives conglomerates fresh firepower to invest in high-growth, capital-intensive industries such as renewable energy, electric mobility, and digital platforms.

Some of these trends are being driven by global corporate actions of MNCs. For example, General Electric (GE) spinning off into 3 business lines, Honeywell’s announced split, BASF India’s split shows a similar pathway of incubating, scaling and then separating for investors to back whichever stream(s) they like. 

Key Benefits for Investors

• Access to Iconic Brands – Own stakes in India’s most respected and recognisable companies.

• Sectoral Diversity – Exposure to multiple industries through a single investment.

• Professional Management – Experts select top-performing businesses within each group.

• Participation in Growth & Restructuring – Benefit from both expansion and value-unlocking events.

The Bottom Line

Business Conglomerate Funds might give retail investors a unique gateway into India’s most powerful and diversified business houses without the complexity or cost of buying individual shares. By tapping into professional fund management, you may ride on the growth, restructuring, and innovation of India’s corporate royalty – and potentially watch your portfolio grow alongside them.

Disclaimers

The views and investment tips expressed by experts are their own and are meant for informational purposes only and should not be construed as investment advice. Investors should check with their financial advisors before taking any investment decisions.

* Source: Financial Express (March 2025), The Hindu (January 2025). The sector(s)/stock(s) mentioned in this document do not constitute any recommendation of same and Baroda BNP Paribas Mutual Fund may or may not have any future position in these sector(s)/stock(s).

The material contained herein has been obtained from publicly available information, internally developed data and other sources believed to be reliable, but Baroda BNP Paribas Asset Management India Private Limited (BBNPP), makes no representation that it is accurate or complete. BBNPP has no obligation to tell the recipient when opinions or information given herein change. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. This information is meant for general reading purposes only and is not meant to serve as a professional guide for the readers. Except for the historical information contained herein, statements in this publication, which contain words or phrases such as ‘will’, ‘would’, etc., and similar expressions or variations of such expressions may constitute forward-looking statements. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. BBNPP undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. Words like believe/belief are independent perception of the Fund Manager and do not construe as opinion or advice. This information is not intended to be an offer to see or a solicitation for the purchase or sale of any financial product or instrument. The investment strategy stated above is for illustration purposes only and may or may not be suitable for all investors. The information should not be construed as investment advice and investors are requested to consult their investment advisor and arrive at an informed decision before making any investments. The Trustee, AMC, Mutual Fund, their directors, officers, or their employees shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages arising out of the information contained in this document. Past performance may or may not be sustained in the future and is not a guarantee of any future returns.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.