Reliance emerges as biggest wealth creator after 7 years: MOSL

Mumbai: After a gap of seven years, Reliance Industries has once again emerged the biggest wealth creator over 2014-19, according to Motilal Oswal 24th Annual Wealth Creation Study 2019 released on Wednesday.

“The Rs 5.6 lakh crore wealth created by Reliance is the highest ever so far by a huge margin. Five of the top 10 biggest wealth creators are from the financial sector,” said the study which analysed top 100 wealth-creating companies during the period 2014-19.

It said Indiabulls Ventures is the fastest wealth creator for the second time in a row. The company has emerged as the fastest wealth creator over 2014-19 with a stock return at a whopping 78 per cent compound annual growth rate (CAGR).

The study said Bajaj Finance has the unique distinction of being in the top 10 biggest as well as fastest wealth creators. Rs 10 lakh invested equally among the top 10 fastest wealth creators in 2014 would have grown to Rs 110 lakh in 2019, marking a return CAGR of 61 per cent versus barely 12 per cent for the Sensex.

IndusInd Bank has emerged the most consistent wealth creator by virtue of appearing among top 100 wealth creators in each of the last 10 studies and recording the highest price CAGR of 49 per cent over the 10-year period 2009 to 2019, ahead of Pidilite Industries‘ 40 per cent.

The study said top 100 wealth creators created Rs 49 lakh crore wealth during 2014-19.

“This is the highest ever quantum of wealth created. During 2014-19, Sensex CAGR was only 12 per cent but the pace of wealth creation was healthy at 22 per cent 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.”

On the other hand, the total wealth destroyed during 2014-19 is Rs 8.6 lakh crore. Similar to last year’s study, the financials 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 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 and buyback.

The study identifies the fastest, biggest and most consistent wealth creators. Further, it analyses key trends in wealth creation, provides insights into winning companies and distills strategies for successful equity investing.

Motilal Oswal Financial Services Ltd is a diversified financial services company. Its offerings include capital markets businesses (retail broking, institutional broking and investment banking), asset and wealth management (asset management, private equity and wealth management), housing finance and equity-based treasury investments.