Remember Michael Burry from the ‘Big Short’ movie?
The legendary hedge fund manager predicted the 2008 financial crisis & made millions.
Now, he’s betting big on the blue gold: Water.
Can water become the next big thing?
How can you invest in this theme? A 🧵 x.com
The legendary hedge fund manager predicted the 2008 financial crisis & made millions.
Now, he’s betting big on the blue gold: Water.
Can water become the next big thing?
How can you invest in this theme? A 🧵 x.com
Can the water industry be the next mega-investing theme?
The UN expects the global population to reach 9.7 billion by 2050.
However, freshwater resources are rapidly depleting.
The World Economic Forum estimates that by 2030, water demand will outpace supply by 40%.
The UN expects the global population to reach 9.7 billion by 2050.
However, freshwater resources are rapidly depleting.
The World Economic Forum estimates that by 2030, water demand will outpace supply by 40%.
With urbanization & population growth, we need massive upgrades in water infrastructure.
The World Bank estimates over $1 trillion needs to be invested annually in water-related infrastructure by 2030 to meet SDGs (Sustainable Development Goals adopted by the UN) and address years of underinvestment.
The World Bank estimates over $1 trillion needs to be invested annually in water-related infrastructure by 2030 to meet SDGs (Sustainable Development Goals adopted by the UN) and address years of underinvestment.
Many countries have already stepped up their game in water projects.
Saudi Arabia, for instance, plans to invest $4 billion by 2030 to enhance infrastructure for reusing water for agriculture, industries and urban areas.
India’s not far behind.
Saudi Arabia, for instance, plans to invest $4 billion by 2030 to enhance infrastructure for reusing water for agriculture, industries and urban areas.
India’s not far behind.
Here are some initiatives from the Indian govt. 👇
Jal Jeevan Mission Scheme: Envisioned to provide safe and adequate drinking water through individual household tap connections to all households in rural India
PM Krishi Sinchayee Yojana (PMKSY): Focused on better irrigation—expanding water access to farms, boosting efficiency, and promoting sustainable water use
Atal Bhujal Yojana: Targeting better groundwater management and rainwater harvesting in water-stressed areas across 7 states
Jal Jeevan Mission Scheme: Envisioned to provide safe and adequate drinking water through individual household tap connections to all households in rural India
PM Krishi Sinchayee Yojana (PMKSY): Focused on better irrigation—expanding water access to farms, boosting efficiency, and promoting sustainable water use
Atal Bhujal Yojana: Targeting better groundwater management and rainwater harvesting in water-stressed areas across 7 states
The government allocated ₹1,07,000 crore for water infrastructure in FY24.
A similar trend was seen in the past few years as well.
Govt’s Budget Allocation for Water Capex:
FY22: ₹91,000 Cr
FY23: ₹83,000 Cr
This push for water-related projects has boosted the revenues of many companies in this space.
A similar trend was seen in the past few years as well.
Govt’s Budget Allocation for Water Capex:
FY22: ₹91,000 Cr
FY23: ₹83,000 Cr
This push for water-related projects has boosted the revenues of many companies in this space.
How can you ride the water wave?
There are broadly 3 types of stocks to focus on.
-Water infrastructure
-Water treatment & filtration
-Water pumps & equipment
Let’s discuss them in detail. x.com
There are broadly 3 types of stocks to focus on.
-Water infrastructure
-Water treatment & filtration
-Water pumps & equipment
Let’s discuss them in detail. x.com
- Water Infrastructure Companies
These companies build and maintain the infrastructure for wastewater treatment plants, water supply scheme projects, etc.
Examples: Enviro Infra Engineers and SPML Infra.
These companies build and maintain the infrastructure for wastewater treatment plants, water supply scheme projects, etc.
Examples: Enviro Infra Engineers and SPML Infra.
- Water Filtration Companies
These companies focus on technologies to provide clean water.
They specialize in wastewater management and recycling for various industries. One example is ION Exchange.
Many water infra companies that set up plants also deal with water treatment and filtration.
For example, VA Tech Wabag builds as well as operates water treatment plants for municipal and industrial clients.
These companies focus on technologies to provide clean water.
They specialize in wastewater management and recycling for various industries. One example is ION Exchange.
Many water infra companies that set up plants also deal with water treatment and filtration.
For example, VA Tech Wabag builds as well as operates water treatment plants for municipal and industrial clients.
- Water Pumps & Equipment Manufacturers
These are companies that manufacture pumps, pipes, valves, etc.
You can see some prominent examples in the table.
These are companies that manufacture pumps, pipes, valves, etc.
You can see some prominent examples in the table.
Key Risks
Governments across the globe are spending money in this space, which is creating tailwinds for this sector.
However, this also means many companies heavily depend on a few government entities, and their client base is quite concentrated.
Governments across the globe are spending money in this space, which is creating tailwinds for this sector.
However, this also means many companies heavily depend on a few government entities, and their client base is quite concentrated.
If some major orders get cancelled, these stocks can take a significant hit.
For example, VA Tech Wabag's $317 million Saudi project was recently cancelled, causing the stock to drop by as much as 20% from its peak.
For example, VA Tech Wabag's $317 million Saudi project was recently cancelled, causing the stock to drop by as much as 20% from its peak.
Can water become the next big trend in investing?
Before we wrap up, a quick disclaimer:
None of the stocks mentioned here are recommendations.
We’ve just broken down the water industry’s value chain with some examples.
Make sure to do your own research before investing.
None of the stocks mentioned here are recommendations.
We’ve just broken down the water industry’s value chain with some examples.
Make sure to do your own research before investing.
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