Top 100 companies created highest-ever wealth of Rs 71 lakh crore in 5 years; financial sector top contributor

Top 100 companies created highest-ever quantum of wealth worth Rs 71 lakh crore in the last five years between 2016-21, as per Motilal Oswal 26th Annual Wealth Creation Study 2021. Also, financial sector was the top contributor in this wealth creation journey, highlighted the study. The report also found that five of the top 10 wealth destroying companies were PSUs.

Wealth created is calculated as change in the market cap of companies between 2016 and 2021 (March ending), duly adjusted for corporate events such as mergers, de-mergers, fresh issuance of capital, buyback, etc.

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As per Motilal Oswal study, during 2016-21, Sensex CAGR was somewhat muted at 14%, but pace of wealth creation remained healthy at a 24% CAGR, it said.  

It said that irrespective of market conditions one should stay invested and focus on which stocks to invest in, rather than timing the markets.

"The Financials sector has regained its top spot in Wealth Creation, after briefly losing it in the previous study period to Consumer & Retail. Only 2 Wealth Creating PSUs are Gujarat Gas and Indraprastha Gas," found Motilal Oswal 26th Annual Wealth Creation Study 2021.  

Speaking of wealth destroyers, it said the total wealth destroyed during 2016-21 stand at Rs 11 lakh crore, 15% of the total wealth created by top 100 companies. Five of the top 10 wealth Destroying companies are PSUs. Financials sector is both the top wealth creating and top wealth destroying sector. "The former is due to the private sector banks and NBFCs, and the latter mainly because of public sector banks," said the report.

The Study identifies the fastest, biggest and most consistent wealth creators. Further, it analyses key trends in wealth creation, provides insights into winning companies and distills strategies for successful equity investing.