The top 100 wealth creators in India have created Rs 49 lakh crore during the 2014-19 period, which was the highest ever quantum of wealth created in the country, said the Motilal Oswal 24th Annual Wealth Creation Study 2019 released on Wednesday. Five of the top 10 biggest wealth creators are from the financial sector, the study noted.
Reliance Industries (RIL) emerged as the biggest wealth creator during 2014-2019 after a gap of seven years, according to the report. It added that the Rs 5.6 lakh crore wealth created by Reliance is the highest ever so far by a huge margin.
BIGGEST WEALTH CREATORS (2014-2019)
The report said that had Rs 10 lakh invested equally among the top 10 fastest Wealth Creators in 2014 it would have grown to Rs 110 lakhs in 2019 with a compound annual growth rate (CAGR) of 61 percent against barely 12 percent for the Sensex.
"Sensex CAGR was only 12 percent but the pace of Wealth Creation was healthy at 22 percent CAGR. This reinforces the point that Wealth Creation happens in all kinds of market conditions. So, investors are better off focusing on which stocks to invest in, rather than timing the markets," the report stated.
While Reliance Industries is the biggest wealth creator, Indiabulls Ventures has been the fastest wealth creator for the second time in a row over 2014-19 with a stock return at a whopping 78 percent CAGR.
Bajaj Finance has the unique distinction of being in the top 10 biggest as well as the fastest wealth creators, the report stated. Meanwhile, IndusInd Bank has emerged as the most consistent wealth creator by recording the highest price CAGR of 49 percent over the 10-year period from 2009 to 2019, ahead of Pidilite Industries, which has delivered 40 percent return.
Among sectors, the study further added that the financial sector has emerged as India's biggest wealth-creating sector over the 2014-19 period for the third consecutive year. The surge in wealth creation in the sector has been led by the private banks and non-banking financial companies (NBFCs), the report observed.
However, public sector undertakings' (PSUs) wealth creation performance remained weak during 2014-19. According to the study, the number of PSUs in the top-100 wealth creators is only nine, including IOC, BPCL, HPCL, Power Grid Corporation, Petronet LNG, Indraprastha Gas, LIC Housing, Bharat Electronics, and NBCC.
It added that the wealth created by these 9 PSUs is only 6 percent of the total.
The total wealth destroyed during 2014-19 has been Rs 8.6 trillion. Similar to last year's study, the financial sector has the unusual distinction of being the biggest wealth creator thanks to private banks and NBFCs and also the second biggest wealth destroyer thanks to state-owned banks.
On the other hand, the total wealth destroyed during 2014-19 is Rs 8.6 lakh crore. "Similar to last year's study, the financial sector has the unusual distinction of being the biggest wealth creator (thanks to private banks and non-banking finance companies) and also the second-biggest wealth destroyer (thanks to state-owned banks)," the study noted.
Motilal Oswal 24th Annual Wealth Creation Study 2019 analyses the top 100 wealth-creating companies during the period 2014-19. Wealth created is calculated as a change in the market cap of companies between 2014 and 2019, duly adjusted for corporate events such as mergers, de-mergers, fresh issuance of capital, buyback, etc.
The study identifies the fastest, the biggest and the most consistent wealth creators. Further, it analyses key trends in wealth creation, provides insights into winning companies and distills strategies for successful equity investing.
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