Kumbh, cricket and concerts give Indian tourism a high. So why are the stocks down?

Subscribe to enjoy similar stories. India’s tourism sector has been on a recent high buoyed by three elements integral to Indian culture: religion, cricket, and music.

To be more specific, the once-in-a-lifetime Maha Kumbh Mela; the Indian cricket team’s recent success, including the Champion Trophy title it won on Sunday; and concerts headlined by the likes of Diljit Dosanjh, Bryan Adams, Ed Sheeran, and Coldplay. But while both industry and market experts are optimistic about the prospects of India’s travel and tourism sector, the Nifty India Tourism index has lost more than 9% over the past three months, according to Capitaline data.

And there are only two passively managed funds providing exposure to India’s travel and tourism boom—one from Kotak Mutual Fund and the other from Tata Mutual Fund. What gives? On the index’s decline, market experts blamed it on the wider market correction, assuring that the sector holds much potential for investors.

So why aren’t there more funds dedicated to India’s travel and tourism segment? For this, Sandip Bansal, deputy chief investment officer at ASK Investment Managers, offered two explanations: the sector does not have many large investible companies, and several of the mid-cap or small-cap firms in the space are covered by broader consumption or infrastructure funds. Also read | On tourism, govt's heart is in the right place.

Where's the money though? That said, according to Bansal, India’s tourism industry presents multiple investment opportunities across airlines, luggage manufacturers, hotel operators, and travel technology companies as more people travel for leisure or business. “The travel and tourism sector is certainly poised for outperformance," said Prashant Biyani,