Investment opportunities in India's booming wedding market

Interestingly, the industry also offers investment opportunities. And like the marriage, experts advice long-term vow

The Indian wedding industry is seeing a remarkable boom, with projections indicating that it could reach a staggering Rs 10 trillion by 2025.

 

Interestingly, the industry also offers investment opportunities. And like marriage, experts recommend long-term vow.

 

“Indian weddings are a big driver of discretionary spending in the fashion, jewellery, travel, catering, and entertainment industries. However, because the informal sector accounts for a large portion of wedding-related economic activity in India, capitalising on the wedding season (in isolation) for short-term investment profits is difficult and not recommended. Investing in broader stock market indices for the long run to benefit from increased economic activity is a more sensible investment strategy,” said Animesh Hardia, Senior Vice President, Quantitative Research at 1 Finance.

 

 

Key growth drivers 

 

Several factors contribute to the robust growth of this industry. 

  Rising disposable incomes: As household incomes increase, families are more willing to invest in extravagant weddings that reflect their social status. 

 

Influence of celebrity culture: Bollywood and high-profile celebrity weddings set trends that many aspire to emulate. This influence extends to fashion, decor, and overall wedding experiences, driving demand for luxury services and products. 

 

Government initiatives: The Indian government has launched campaigns like ‘Wed in India’ aimed at promoting India as a premier wedding destination. Such initiatives enhance infrastructure and attract international attention to the domestic wedding market. 

 

Investment opportunity 

 

“The most common sectors involved in the wedding market are fashion and clothing, automotive, jewelry, hotels, bedding, and home decor. In the past week, within the wedding-related sector, top gainers included Kalyan Jewellers (up 7.2 per cent) and Vedant Fashions (Manyavar) (up 4.81 per cent). Conversely, Raymond (down 6.77 per cent) is one amongst the top losers,” said Amitabh Lara, Executive Director & Unit Head -- Mumbai, Anand Rathi Wealth Limited.

 

This data shows that even though certain stocks belong to a particularly hot seasonal sector, they may not always be the best investment picks.

 

For most investors, who may not have the expertise to analyse the fundamentals behind stock movements, selecting the right stock in a seasonal market can be challenging. Apart from this, these stocks also need tactical entry and exits, which, if not done at the right time may lead to deep losses.

 

“For long-term investors, we suggest opting for diversified mutual funds that cover multiple sectors, market caps, and categories. A balanced approach with an 80:20 equity-to-debt ratio is advisable, focusing on a portfolio allocation of 55 per cent in large caps and the remaining in mid and small caps across categories. You can pick funds from categories such as large cap, mid cap, small cap and other strategy based categories such as contra, focused etc which have decent alpha generation potential. This strategy provides balanced exposure and potential growth across market cycles,” Lara said.