During 2017-22, the top 100 Wealth Creators of India Inc created wealth of ₹92.2 lakh crores, the highest ever by far. The Motilal Oswal Annual Wealth Creation Study 2022 says that for the fourth time in a row, Mukesh Ambani-led Reliance Industries has emerged the largest Wealth Creator with an increase in market capitalisation (m-cap) of ₹13 trillion over 2017-22.
This takes Reliance’s overall No.1 tally to 9 in the last 16 five-year study periods. As in recent studies, TCS, Infosys and HDFC Bank remain among the top five Wealth Creators. Adani Enterprises and Adani Transmission have topped the ‘all-round’ ranking in the study. Both companies have seen their stock price nearly double each year during the five-year period under consideration (2017 and 2022).
The ‘all-round’ rating is a cumulative rank of companies based on parameters such as biggest, fastest and consistent. ‘Fastest’ table was topped by Adani Transmission followed by Patanjali Foods (erstwhile Ruchi Soya) and the ‘consistent’ ranking was topped by group firm Adani Enterprises, followed by Alkyl Amines and Coforge.
Biggest wealth destroyers for the period are Vodafone Idea (₹1.2 trillion m-cap), Indian Oil (₹71,300 crore) and Coal India (₹67,900 crore). The total erosion in m-cap of all the companies that saw de-growth in their stock price during the 2017-2022 period stood at ₹14.2 trillion. It was around 15 per cent of the Rs 92.5 trillion wealth created — highest during the 27 years of the study.
Technology sector is the largest wealth creating sector between 2017 and 2022, followed by the financial sector. The financial sector, coming out of despair, should continue to dominate Wealth Creation in the foreseeable future.
The study says that there are only two types of companies – Consistents and Volatiles. Consistency is the source of outperformance; Volatility is the source of underperformance, excellence in execution is non-negotiable for consistency and buying below median valuations tilts the odds in favour of investors.
Adani Enterprises is the Most Consistent Wealth Creator for the second successive year. “We define Consistent Wealth Creators based on the number of years the stock has out-performed in each of the last five years. Where the number of years is the same, the stock price CAGR decides the rank”.
Over 2017-22, Adani Enterprises has emerged as the Most Consistent Wealth Creator. It has outperformed the BSE Sensex in all the last five years, and has the highest price CAGR of 97%. Two Adani Group companies are the Best All-round Wealth Creators. “We define All-round Wealth Creators based on the summation of ranks, under each of the 3 categories – Biggest, Fastest and Consistent. Where scores are tied, the stock price CAGR decides the All-round rank”.
Based on the above criteria, Adani Enterprises has emerged as the Best All-round Wealth Creator, followed by group company Adani Transmission. “Our wealth creation studies are attempts to study the past as a guide to the future, and gain insights into the various dynamics of stock market investing,” the brokerage firm said in a note.