Home Financial & Banking Terms What are Blue Chip Companies?

What are Blue Chip Companies?

Blue Chip Companies

Blue Chip companies are nationally recognized and well established companies with a steady earning and no extensive liabilities for potentially long periods of time. They often sell high quality and well known products and services to the consumers in the country.

Examples of Blue Chip Companies in India

Some of the leading Blue Chips in India are Reliance Industries, TATA Consultancy Services, Oil and Natural Gas Corporation Limited, HDFC Bank, Infosys, State Bank of India, Coal India, ICICI Bank etc. These kind of companies will stand strong without being affected in any economic crisis or financial downturns. They will operate smoothly earning profit hence contributing to the long standing of growth and stable grossing.

Benefits

The stocks of these Blue Chip Companies are called Blue Chip Stocks promising uninterrupted supply of dividends to stock holders. Also Blue Chip Companies have a strong background of providing a steady rise in the dividends paid to each share.

Most investors buy stock from Blue Chip Companies as they are safe to invest, expectable returns, consistent payment of dividend and their ability to stay protected and profited during any crisis.

Scam and Frauds

Investing in Blue Chips may not be safe always. Even a Blue Chip company or its management may get involved in scam or fraud (Satyam scandal / Coal Scam). These kind of frauds may lead to draining of investor funds and reduction in market capitalisation of a Blue Chip company.