Emerging Financial Ghettos

While TV channels were riveted by Khobragade circus, India's richest man took a momentous decision of shuttering his non-vegetarian food business, ostensibly owing to objection from vegetarian share holders. The move evoked three cheers from Internet Hindu keyboard warriors and PETA types who hailed it as an 'ethical' step. Did I hear K G Basin, Swiss Bank accounts, 2G, Aston Martin ... ? Oh come on after all which businessman does not have run-ins with tax and law enforcement agencies. So why deny Mukeshbhai his due.

The move smacked of an exclusivism similar to the one displayed by upmarket housing societies of South Mumbai barring tenants or buyers who happen to be non-vegetarians (read Muslims). Though talking of exclusive housing societies in Mumbai, it must be mentioned that there are similar enclaves of Parsees, Muslims and Christians and this trend has more or less continued ever since it got a booster dose after the Babri Masjid demolition riots.

Businessmen are known to trim sails according to political winds, and since Narendra Modi seems to be the frontrunner for the next elections, they are working overtime to build bridges with the party in waiting. Hence the above move should be seen in that backdrop. Otherwise why would they shutter down meat business now, after running it for five years. And to be fair to Ambanis they are not alone. Most business houses and the Sensex-driven class sees the current UPA government as lame duck with no quaking to do.

Coming back to investing, this kind of 'ethical' activism has been prevalent in the Indian bourses for nearly a decade. Already in the BSE there are Halal and Dharmic stocks. The former shuns businesses that charge interest, deal with alcohol, pork, liquor and gambling, while the latter professes to help Hindus, Buddhists, Jains, and Sikhs to invest in stocks that are in sync with their religious beliefs. The don'ts in Dharmic list comprises tobacco, aerospace and defence, brewers, casinos, gaming, and pharmaceuticals that indulge in animal testing and genetic modifications. Soon we may even have Khap stocks index listing companies that promote sex determination equipment and proscribing companies involved in making ladies jeans and ingredients for chowmein!

The question arises as to how does one monitor whether these companies are not straying from the moral high road of religion. Moreover what about other ethical tenets such as desisting from employing child labour, fleecing workers and customers or land grab from poor tribals. Sorry, they cause as much excitement to Sensex movers and shakers as Khobragade's maid to Indian media.

As more such financials ghettos emerge in the Indian investment scape, the analysts can safely bet on a 'secular' growth for these stocks.

Also Read: Bangalore Beat