In terms of market valuation, India’s top 100 companies valuation have generated Rs 28.4 lakh crore wealth in the last five years, says a latest study.
According to leading brokerage firm Motilal Oswal's '21st Annual Wealth Creation Study', Tata Group firm TCS retains the numero uno position in the chart by generating over Rs 2.6 lakh crore for the period 2011-16. The firm has retained the rank for the fourth year in a row.
The IT giant was followed by private sector lender HDFC Bank, as per the study, which looks into top 100 wealth creating companies during the period 2011-16.
Overall, top 100 companies created Rs 28.4 lakh crore during 2011-16, which is the third highest ever quantum of amount generated.
The wealth created is calculated as change in the market cap of companies between 2011 and 2016, duly adjusted for corporate events such as mergers, de-mergers, fresh issuance of capital, buyback, among others.
While Ajanta Pharma was found to be the fastest wealth creator for the second year in a row, Asian Paints emerged as the most consistent wealth generator.
Sector-wise, consumer/retail emerged as the country's biggest wealth creating industry for the second consecutive time.
The report noted that public sector undertakings wealth creation performance continues to be dismal during 2011-16.
Only 7 PSUs -- BPCL, HPCL, Petronet LNG, Concor, LIC Housing, Bharat Electronics and Power Grid Corporation -- figure in the top 100 wealth creators list and contributed to 4 per cent of the total wealth generation.
Meanwhile, wealth worth Rs 15 trillion was destroyed during 2011-16. This accounts for 53 per cent of the total wealth created by top 100 companies.
"Seven of the top 10 wealth destroyers are in the business of global commodities," Motilal Oswal said.
"Metals/mining is the biggest wealth-destroying sector as was the case last year, followed by banking and finance, which mainly includes state-owned banks at the wrong end of the NPA cycle," it added.
Motilal Oswal noted that while the compound annual growth rate of Sensex stood at 5 per cent, the pace of wealth creation was healthy at 18 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," it said.
(With PTI inputs)
