If your love for Electric vehicles (EV) took you outside India to invest in Elon Musk's Tesla then you have not made a bad choice. The stock which has rallied by about 500% so far in 2020 crossed market capitalisation of $500 billion in November.
Tesla is Wall Street's seventh most valuable company, just behind Berkshire Hathaway, and chances are that the rise will only continue as it would be added to the prestigious S&P 500 index in December.
Also Read: Tesla to join S&P 500 in December, to be among top-10 companies
S&P Dow Jones Indices said Tesla will be one of the largest companies added to the S&P 500 in the past decade. The company said it is considering adding Tesla in two stages on December 14 and 21.
Many Indian investors might not be able to drive one back home but have invested a considerable sum in the Tesla stock, data from Stockal showed.
“Tesla is one of the highly bought and traded stocks on the Stockal platform. Since early this year when Tesla was trading at around $430 or so and ever since pandemic, Tesla has been one of the stocks which has constantly grown this year and have given excellent return,” Vinay Bharathwaj, Co-Founder, and Co-CEO, Stockal told Moneycontrol.
Its growth has been so phenomenal that it breached the $500 B market-cap in November and pretty soon it will be added to the S&P 500 index and has propelled Musk to be the second richest man in the world.
From the Indian context, Tesla’s market capitalisation is 4 times the market capitalisation of the BSE Auto Index index. Top companies in terms of market-capitalisation in dollar terms (Rs 74/USD) in the auto index include Maruti Suzuki ($29 bn), M&M ($12 bn), and Bajaj Auto ($12 bn).
“There is a general positive sentiment towards the stock globally that it is disrupting the automotive industry in general and that is why it is getting a very high premium in the market. Not only Tesla but Chinese EV companies such as XENG and NIO have shown double-digit growth,” says Bharathwaj.
He further added that about 10 percent of the overall AUM in Stockal would have been invested in Tesla. “Since there is an overall positive sentiment in the Market for EV, we also have a Stack (model Portfolio) created where investors can get exposure to all EV companies by investing in a single click,” says Bharathwaj.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.