To start with, let me clarify my view on "long term" as far as stocks are concerned.

Many business TV channels suggest that for stocks, "long term" is anything over one year. In my opinion, when you are investing in stocks, "long term" means five years or more.

With that in mind, let me answer your question. For long term investment, you need companies with solid fundamentals and visible growth going forward. I would recommend the following stocks:

1. Reliance Industries: It has given excellent returns in the past, and would continue to do so in the future. Its refinery business provides continuous cash flows, which the company is investing in new businesses. Its oil exploration business has also consistently proved to be successful

Reliance has entered new businesses like Retail and SEZ. Since Reliance has a very strong track record in project execution on a very large scale in the past, these ventures are also expected to be very successful.

2. ITC: Invest in it not from the cigarettes perspective, but because of the rural growth story.

While its cigarettes business provides a price insensitive, continuous cash flow, ITC's investment in the e-choupals and choupal sagars has a great potential going forward. With the economy growing at astonishing speeds, rural demand and rural supply chain would provide a big push to the company's bottomline.

ITC's hotel business is one more incentive to invest in it.

3. Tata Motors: It has a wide range of car and bus / truck models under development, and these would provide a renewed push to the company's sales. Its Rs. 1 Lakh car is also expected to create ripples in the low-end car market, like Indica did when it was launched.

With booming economy, its transport vehicles would also have a good growth in sales.

The company is a fore runner in the acquisition of Land Rover and Jaguar brands from Ford. If this becomes successful, it would benefit from the technology that it gets, and would also get a ready presence in the European market.

4. Tata Steel: With the acquisition on Corus, it has access to the latest technology, which would enable it to produce products having a higher margin. It has also obtained a stronghold in the European market.

5. Reliance Communication: It is the largest player in CDMA, and is now entering the GSM market. With nation wide presence and deep pockets, it is bound to be successful in a short time.

With more and more people purchasing mobile phones, and also upgrading to various value added services, both the top line and the bottom line should keep growing for quite some time.


Apart from these stocks, you should also look at some mid-cap mutual funds (MFs), so that you can benefit from the high growth rates for top quality mid cap stocks. Reliance MFs Growth fund can be a good option.

Happy investing!

Hi Santosh,

It is a good decision to invest for the long term and be an investor. Congratulations - you have taken a very wise first step!

Since your investment horizon is long, your decision to invest in mid caps and small caps is also correct. These are small companies that have the potential to become the leaders in their fields. Also, since they are small in size, their growth rate (in percentage terms) is also usually very high.

The real problem lies in identifying good mid caps and small caps. There are lots of mid and small caps, and identifying a potential winner can be really tough. Therefore, I would advise you to invest through mutual funds.

A good mid cap MF with an excellent track record is Reliance Growth Fund. (That’s where I have invested!) Another good scheme is Franklin Templeton Prima fund, but its performance in recent times has not been very good.

But if you want to do research about individual stocks, you can go to www.MyIris.com. Another very good site is the research section at www.icicidirect.com (http://content.icicidirect.com/research/predefinedsearch.asp?icicicode=type%20symbol) Here, there are many predefined filters that you can choose to isolate the stocks that interest you. (One of the filters gives you large and mid cap stocks with a high dividend yield).

Happy investing!

Dear Madhav,

I can understand your confusion! I am answering your questions in a different order, as that is more logical.

4. You can find out the latest state of the company through the Ministry of Company Affairs (http://www.mca.gov.in/), and using the many investments related websites available on the internet.

I suggest that this should be your first step – the process of dematerialization of shares for a deceased person is a little cumbersome, and therefore, it would make sense to do it only for companies that are still operational.

Once you get a list of companies that are still operational, find out their share prices, and further narrow down the list to companies in which your grandfather had significant investment (number of shares X price of each share).

Concentrate your efforts only on these companies.

1. If your grandfather was a single holder, the following documents would normally be needed from the legal heirs:

- Request letter (for transmission of shares in favour of the legal heirs)
- Copy of death certificate of the deceased shareholders. This should be attested by gazetted officer or notary public.
- Certified copy of the succession certificate or will
- Original share certificates
- Current specimen signatures of the legal heirs

The actual documents needed vary from company to company, and some companies have their own forms. So, please check with each company individually. Some companies would also have this information on their websites.

Please note that you can ask for dematerialization of shares along with this request for change of name.

2. If your grandfather was a single holder, the following documents would normally be needed from the surviving holders:

- Request letter for deletion of name of the deceased shareholder
- Copy of death certificate of the deceased shareholders. This should be attested by gazetted officer or notary public.
- Original share certificates
- Name deletion form, duly filled and signed by the surviving shareholders
- Current specimen signatures of the surviving shareholders

Again, the actual documents needed vary from company to company, and some companies have their own forms. So, please check with each company individually. Some companies would also have this information on their websites.

And again, you can ask for dematerialization of shares along with this request for change of name.

3. Any change in signature has to be conveyed to the company. This usually needs attestation from your bank, and for some companies, this may also require an affidavit.


5. The process for getting a duplicate certificate also varies from company to company. But it usually involves a police FIR, and affidavits. It would be better to check with the respective companies.

As I mentioned before, this is a cumbersome process, and varies from company to company. So, it would make sense to do this only for companies where you have a significant investment.