Indian equity markets have been reaching new heights in recent days. The benchmark index Sensex touched and crossed 60,000 for the first time ever. It is really noteworthy that the last 10,000 points were added in just 246 days. Broader Nifty is also about to reach the new benchmark of 18,000 it needs just 150 points to reach the new height. The major reason behind bull roaring and markets soaring is increased retail participation. As Sensex now reaching new heights of 60,000 points, shareholders of India’s corporate houses have a good reason to be happy about.
Tata leads the pack in creating wealth for shareholders
Speedy recovery in their earnings after the first Covid wave has bolstered the confidence of investors. This lead to a skyrocketing rally in group companies’ share prices and, market capitalizations of India’s fabled business houses surged. This invariably has created wealth for shareholders.
The House of Tatas has turned out to be the largest wealth-creator for shareholders. As per a report, Tata’s 28 listed entities together added more than Rs 6 lakh crore wealth for investors since January 2021. This accounts for a return of over 40%.
Trailing behind the Tata Group, Mukesh Ambani-led Reliance Industries (RIL) Group ranked at the second spot. RIL’s nine listed firms cumulatively added close to Rs 4 lakh crore wealth for investors, giving a return of 28%. The third rank was grabbed by whereas the Adani group ranked fourth. L&T group came 5th.
The game of Leaders and Laggards
According to sources, seven of the top 10 business groups ranked according to their market capitalizations outperformed the benchmark Sensex. RIL and Mahindra have performed in line with the index, while HDFC Group has underperformed. At the same time when the market is reaching new highs, there are some, who are still lagging behind. Hero, Indiabulls, and beleaguered Kishore Biyani-led Future groups have given negative returns.
As per the report, CK Mehta Group owner of Deepak Fertiliser and Deepak Nitrite, created the fastest wealth for shareholders while generating over 150% return this year.
At the same time, the Rajan Raheja Group, which runs Exide Industries, Prism Johnson, and Standard Batteries, created the slowest wealth for shareholders. It generated just 4% returns.
Sharekhan BNP Paribas research head Sanjeev Hota, said: “Strong recovery in earnings after the first wave of Covid and a re-rating of companies where valuations turned attractive during the crises have been the driving factors for the rise in market capitalization of top business groups”.
“A global flush of liquidity and overall equity rerating has kept the buying interest in these companies through both domestic and foreign institutional funds,” he added further.