As the big get bigger, investors shouldn’t bet on leaders alone

Big firms are getting bigger. This may be a worry for anti-trust experts and economists, but investment experts see an opportunity for clients.

“There is a potential for winners to keep increasing market share. Consolidation across sectors has accelerated in the last three years. This should eventually lead to more pricing power,” DSP Mutual Fund said in a communication to investors in its funds. Research also suggests that consolidation of market share results in lower wages and greater bargaining power with suppliers. So in a sense, it’s the best of both worlds when investors bet on firms with disproportionate market share gains.

While much has been written about the massive growth of the big tech firms globally, India is witnessing its own version of consolidation.