The Motilal Oswal study reveals a cumulative wealth loss of ₹66,600 crore among the top 10 companies, with consumer sectors heavily impacted. Vodafone Idea and Rajesh Exports are notable wealth destroyers, while the overall trend indicates India's highest wealth creation in the last three decades.
According to Motilal Oswal's 30th Annual Wealth Creation Study, released earlier this week, the five-year period from 2020 to 2025 has delivered the highest wealth creation in the study's three-decade history.
The study, led by Raamdeo Agrawal, Chairman, Motilal Oswal Group, examines India's evolving wealth creation landscape. This year's theme, 'India - The Multi-Trillion Dollar Opportunity - Compounding Economy, Compounding Stocks,' is an exploration of how India's economic compounding is set to create exponential opportunities for investors, businesses, and capital allocators.
However, the report also highlights a contrasting trend: several stocks -- predominantly from consumer-facing sectors -- have emerged as wealth destroyers during this period.
The total wealth destroyed, though, remains lowest in the last 17 years of the study at ₹66,600 crore, a mere 0.4 % of the total wealth created by the top 100 companies. Only 24 of the top 500 companies destroyed wealth, the Motilal Oswal study stated.
The top 10 wealth-destroying stocks accounted for as high as 82% of the total wealth destroyed, and interestingly, all belonged to consumer-facing businesses.
Two stocks, namely Rajesh Exports and Whirlpool India, emerged as top wealth destroyers, wiping off over ₹10,000 crore of investor wealth in five years.
Rajesh Exports, a gold refiner, manufacturer, and exporter of gold products, has seen its stock decline 60% in the last five years. On a CAGR basis, it has lost 19%. Whirlpool India -- manufacturer of electronics goods -- has seen a -11% CAGR in these five years with the stock falling 56% in absolute terms.
Bandhan Bank followed suit as its shares witnessed a total CAGR of -6%, wiping off ₹8400 crore of investor wealth.
Beleaguered telecom firm Vodafone Idea, meanwhile, has seen a ₹7100 crore wealth erosion. This is despite an over 50% rally in the last six months alone. It's the only stock in the list having a positive CAGR of 17%.
Dhani Services was the fifth largest wealth destroyer in the list, eroding ₹4400 crore during this period. Its CAGR is at -12%.
Meanwhile, the bottom five on the list included Relaxo Footwear, PVR Inox, Spandana Sphoorty, Zee Entertainment and Future Consumer, shedding ₹14,100 crore cumulatively.
Among the top sectors, consumer and retail topped the list, with ₹29600 crore wealth destruction, forming 44% of the total share. Meanwhile, financials and telecom followed. IT, realty, media and capital goods were other sectors that fared poorly.
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