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Top firms that created

wealth of 49 trillion

in five years

Financial sector wealth creators is only 9 and the wealth
tehelka bureau At a time when Indian banks and non- created by these 9 PSUs is just 6 per cent
banking financing companies are going of the total.
through a rough patch, the Motilal Oswal The 9 wealth creating PSUs are IOC,
op 100 Wealth Creating com- 24th Annual Wealth Creation Study 2019 BPCL, HPCL, Power Grid Corporation,
panies created a staggering says that financials as a sector created Petronet LNG, Indraprastha Gas, LIC
wealth of 49 trillion in India the most wealth over a five-year period Housing, Bharat Electronics, and NBCC.
during the five-year period for the third consecutive time. Largely The only positive is that wealth- creating
T from 2014-2019. Significantly, private-sector banks and non-banking PSUs’ 2014-19 profit after tax (PAT) com-
this is the highest ever in any 5-year span financial companies led the rally in the pound annual growth rate (CAGR) at 22
in the past. Reliance Industries smashes sector. per cent is higher than private sector’s 13
all records as the biggest wealth creator The other sectors, which created per cent. This has led to PSUs’ price CAGR
over 2014-19. The 5.6 trillion wealth cre- the most wealth in the past five years, of 20 per cent almost matching that of
ated by Reliance is the highest ever so far are consumer goods/retail, oil and gas, the private sector.
by a huge margin. However, five of the technology, and auto. The top five sec- Alongside wealth creators are wealth
top 10 biggest wealth creators are from tors accounted for 85 per cent of the Rs destructors and the total wealth de-
the financials sector. 49 lakh crore wealth created in the past stroyed during 2014-19 is 8.6 trillion, 18
According to the 24th “Annual Wealth five years. At the bottom of the heap were
Creation Study” (2014-2019) by Motilal capital goods, utilities, and telecom.
Oswal Financial Services Limited, the Re- The study points out that financial
liance Industries, HDFC Bank, TCS, Hin- sector companies topped wealth crea-
dustan Unilever, Kotak Mahindra, Bajaj tion, whereas telecom sector companies
Finance, Infosys, Maruti Suzuki, Axis performed poorly with only one compa-
Bank are the top performers. Indiabulls ny successfully creating wealth. March
Ventures is the fastest wealth creator for 2019 over March 2014, Wealthex is up 177
the second consecutive year. per cent whereas the Sensex is up 73 per
Bajaj Finance is the only company cent that is 104 per cent out performance
with a unique distinction of being in the over 5 years. Indeed financials is the big-
top 10 list of both, biggest and fastest. gest wealth-creating sector for the third
The IndusInd Bank is the most consist- consecutive year. Another fact that has
ent as wealth creator. IndusInd Bank has emerged is that private banks and NB-
emerged the most consistent wealth cre- FCs have led the surge in wealth creation
ator by recording the highest price CAGR in the sector. In terms of share of wealth
of 49 per cent over the 10-year period created, IT is the biggest loser over the
2009 to 2019, ahead of Pidilite Industries, last 5 years, and Oil & Gas is the biggest
which delivered 40 per cent. gainer.
Wealth created is calculated as
change in the market capitalisation of PSUs disappoint
companies between 2014 and 2019, duly When we analyze wealth creation in
adjusted for corporate events such as Private v/s PSU, we find that the PSUs
mergers, de-mergers, fresh issuance of remain insignificant in wealth crea-
capital, and buyback, among others. tion. The number of PSUs in the top 100

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