Senior Ambani biggest wealth creator, junior Ambani worst

No prizes for guessing. According to Motilal Oswal’s “Wealth Creation Study 2006-11” report, Reliance Industries Ltd (RIL), India’s biggest private-sector company by market capitalisation, is the biggest wealth creator for the fifth time in a row.

While RIL added almost Rs 1,74,200 crore of investor wealth during the past five years, tech firm TCS came in second as it created Rs 1,37,900 crore of wealth during the same period. State Bank of India came third.

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In addition, the report had a list of the biggest wealth destroyers. Of the Rs 3,25,400 crore destroyed, Anil-Ambani run Reliance Communication accounted for 8 percent of that share. While Suzlon topped the list of total wealth destroyed, RCom came in at second spot with a destruction of Rs 25,200 crore.

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Between financial years 2006 and 2011 (April-March), total wealth destroyed stood at almost 15 percent of total wealth created vis-a-vis 2 percent, according to their last study which covered financial years 2005-2010 (April-March).

That was also reflected in the increase in the number of wealth-destroying companies - up to 1,036 from 650 earlier. While Suzlon, RCom and Satyam Computer accounted for a combined 25 percent of total wealth destroyed, among sectors, capital Goods, telecom, technology, construction/real estate accounted for almost 56 percent of shareholder wealth destroyed.

The study also named companies that have been the fastest and most consistent wealth creators.

Sanwaria Agro topped the list of fastest wealth creators as its stock price climbed at a compounded annual growth rate (CAGR) of 119 percent over the past five years. Adani Enterprises and Bhushan Steel emerged second and third, posting growth of 86 percent and 64 percent, respectively. (see table)

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However, the most consistent wealth creator was Kotak Mahindra Bank, followed by Sun Pharma and Asian Paints.

Among sectors, financials emerged as the largest wealth-creating sector. According to the study, its share in the total investor wealth created increased to 24 percent at the end of March 2011 compared with 12 percent at the end of March 2006.

The report also said the importance of the financial sector would increase once insurance companies hit the bourses and new banking licences are issued.