PSU firms fare no better with 5 placed in top 10
The last five years (2008 to 2013) witnessed unprecedented wealth destruction of Rs 17 lakh crore in Indian stocks markets with Ambani brothers top the list among the top 100 companies. State-owned firms fared no better with five PSU firms including MMTC and NMDC among the top 10 wealth destroyers, as per a study by Motilal Oswal Financial Services.
While Mukesh Ambani’s Reliance Industries topped the list with wealth destruction of Rs1,128billion, followed by brother Anil Ambani’s Reliance Communication with Rs921billion of market cap wipe off from 2008 to 2013, according to Motitlal Oswal Financial Services Ltd’s `Annual Wealth Creation Study.
“The 2008-13period saw unprecedented wealth destruction of over Rs17trillion, almost entirely wiping out the total wealth created by top 100 companies,” the study said.
During the 2007-2012period the wealth destruction remained at Rs5425billion, much lower than 2008-13period when Indian stock market saw wipe off of Rs 17140billion or Rs17.14trillion.
“The irony is that the biggest wealth destroyer during this period is none other than Reliance Industries – five times consecutive biggest wealth creator from 2007 to 2011.
Five of the top 10 wealth destroyers are public sector undertakings with MMTC seeing a wipe off of Rs 891billion, followed by NMDC with wealth destruction to the tune of Rs822billion. DLF saw the fifth top m-cap erosion of Rs 703billion.
“One-third of the wealth destroyed can be attributed to three broad ownership groups Reliance (Mukesh Ambani), Reliance (Anil Ambani) and government of India.
Reliance Power saw wipe off of Rs 619 crore, followed by BHEL, which lost Rs 574billion and Steel Authority of India (Sail) at Rs506 crore.
Sunil Mittal’s Bharti Airtel was the ninth top wealth destroyer with a m-cap erosion of Rs 460billion in the last five years and NTPC is the 10th in this `name-and-shame’ list at Rs 454billion in wealth wipe off.
“The stock market’s perception of ineffective management (including capital mis-allocation, consistent failure to deliver on guidance, low dividend pay out etc) is a major source of wealth destruction. When the market is disappointed, it does not spare even those stocks which were its darlings till recently,” the report said.
Among the sectors, metels/mining saw the biggest wealth destructor at Rs 2896billion constituting 17 per cent of total wealth wipe off in the last five year period. This is followed by capital goods sector at Rs 1,895billion, and construction/real estate at Rs 1805billion. Telecom sector is fourth biggest wealth destructor at Rs 1693 billion and utlities at Rs 1678billion.
Oil & Gas sector accounted for Rs1520billion, followed by technology at Rs 1519billion in wealth destruction. Banking & finance stood eighth in the wealth destruction sectors’ list with a m-cap wipe off of Rs 679billion, followed by textiles’ sector at Rs318billion.
The last five years (2008 to 2013) witnessed unprecedented wealth destruction of Rs 17 lakh crore in Indian stocks markets with Ambani brothers top the list among the top 100 companies. State-owned firms fared no better with five PSU firms including MMTC and NMDC among the top 10 wealth destroyers, as per a study by Motilal Oswal Financial Services.
While Mukesh Ambani’s Reliance Industries topped the list with wealth destruction of Rs1,128billion, followed by brother Anil Ambani’s Reliance Communication with Rs921billion of market cap wipe off from 2008 to 2013, according to Motitlal Oswal Financial Services Ltd’s `Annual Wealth Creation Study.
“The 2008-13period saw unprecedented wealth destruction of over Rs17trillion, almost entirely wiping out the total wealth created by top 100 companies,” the study said.
During the 2007-2012period the wealth destruction remained at Rs5425billion, much lower than 2008-13period when Indian stock market saw wipe off of Rs 17140billion or Rs17.14trillion.
“The irony is that the biggest wealth destroyer during this period is none other than Reliance Industries – five times consecutive biggest wealth creator from 2007 to 2011.
Five of the top 10 wealth destroyers are public sector undertakings with MMTC seeing a wipe off of Rs 891billion, followed by NMDC with wealth destruction to the tune of Rs822billion. DLF saw the fifth top m-cap erosion of Rs 703billion.
“One-third of the wealth destroyed can be attributed to three broad ownership groups Reliance (Mukesh Ambani), Reliance (Anil Ambani) and government of India.
Reliance Power saw wipe off of Rs 619 crore, followed by BHEL, which lost Rs 574billion and Steel Authority of India (Sail) at Rs506 crore.
Sunil Mittal’s Bharti Airtel was the ninth top wealth destroyer with a m-cap erosion of Rs 460billion in the last five years and NTPC is the 10th in this `name-and-shame’ list at Rs 454billion in wealth wipe off.
“The stock market’s perception of ineffective management (including capital mis-allocation, consistent failure to deliver on guidance, low dividend pay out etc) is a major source of wealth destruction. When the market is disappointed, it does not spare even those stocks which were its darlings till recently,” the report said.
Among the sectors, metels/mining saw the biggest wealth destructor at Rs 2896billion constituting 17 per cent of total wealth wipe off in the last five year period. This is followed by capital goods sector at Rs 1,895billion, and construction/real estate at Rs 1805billion. Telecom sector is fourth biggest wealth destructor at Rs 1693 billion and utlities at Rs 1678billion.
Oil & Gas sector accounted for Rs1520billion, followed by technology at Rs 1519billion in wealth destruction. Banking & finance stood eighth in the wealth destruction sectors’ list with a m-cap wipe off of Rs 679billion, followed by textiles’ sector at Rs318billion.
