Mukesh Ambani-led Reliance Industries Ltd (RIL) has emerged as the biggest wealth creator of Indian stock markets in the last 25 years. Oil-to-telecom conglomerate has created a wealth of Rs 6.3 lakh crore between 1995-2020, according to Motilal Oswal’s annual wealth creation study. In fact the gap between the wealth created by second-ranked Hindustan Unilever Ltd (HUL) and RIL is significantly higher. FMCG giant HUL has created a wealth of Rs 4.9 lakh crore during the same period.
In the past 25 years (from March 1995-2020), Reliance Industries Ltd has posted a cumulative net profit of Rs 3.78 lakh crore, followed by State Bank of India (SBI) with a profit of Rs 1.72 lakh crore, Infosys Rs 1.5 lakh crore and ITC with 1.2 lakh crore. According to the brokerage report, Infosys and Bajaj Finance have a creditable performance of being among the top 10, both in terms of fastest and biggest wealth creators.
Sensex’ journey from 3,200 in 1995 to 29,500 in March 2020
Motilal Oswal Financial Services said that its key criteria for calling a company a wealth creator is that it should have outperformed the benchmark index, BSE Sensex. It noted that between 1995 and 2020, the S&P BSE Sensex rose from 3,200 levels in March 1995 to 29,500 levels by March 2020, implying a CAGR of 9.2 per cent. The report highlighted that exactly 100 companies have delivered returns higher than 9.2 per cent.
RIL added much of the gains between 2015 and 2020
RIL’s market capitalisation has grown to Rs 7.05 lakh crore from Rs 12,000 crore in March 1995, with an annualised return of 16 per cent. In fact, RIL has also emerged as the biggest wealth creator over 2015-2020. The study said that it added Rs 4.4 lakh crore wealth between 2015 and 2020. The report also highlighted that this is the seventh time Reliance Industries is achieving the feat of the biggest wealth creator and the second time in succession after a gap of seven years. Moreover, in the last five years, the oil and gas sector has gained the highest share of wealth creation, rising 17 per cent, led by Reliance Industries and oil marketing companies (OMCs).
Infosys fastest, Kotak Bank most consistent wealth creator
IT major Infosys has been the fastest wealth creator in the last 25 years, according to Motilal Oswal’s annual wealth creation study. Between 1995 and 2020, Infosys clocked a price CAGR of 30 per cent to emerge as the fastest wealth creator, backed by a 25-year PAT CAGR of 33 per cent. While Kotak Mahindra Bank has been the most consistent wealth creator between 1995 and 2020. Motilal Oswal’s study noted that besides being the most consistent wealth creator, Kotak Mahindra Bank has also emerged the best All-round Wealth Creator.