Underlying Assets:
Now PFC,REC and IRFC are all financial organisation. I am not sure how they will behave in case a hyper inflation type situation unfolds. I wanted to own some companies which have underlying assets. What better than oil companies. IOC, HPCL, ONGC and Oil India have loads of undelying assets with them. IOC and HPCL easily own land which is atleast worth 1.5x Market Cap.
Downstream Companies:
But since oil prices were very high, and these were supposed to be temporary losses. I chose IOC to give higher weightage as it would have easier time navigating through losses compared to HPCL.
Upstream Companies:
Since crude prices was so high, OIL india was making better profits compared to ONGC (adjusted to market cap).
Bigger companies have better margins and command much better Market Cap by Revenue multiples, but in good conditions both make huge profits and smaller companies tend to outperform. Atleast that was my investment thesis, but both seemed to have performed similarly.
Also, a very good dividend income pool is created. The average dividend for the portfolio built till now is 8%+!!
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