Even as some investors may decide to invest passively through index trying to replicate Sensex returns, the 30-share index has multiplied wealth at a CAGR of 12% in the last 5 years, according to a study. Motilal Oswal’s 23rd wealth creation study notes that Rs 1 lakh invested in the Sensex in 2013 would have grown to Rs 1,75,000 in 2018, delivering a CAGR of 12%. While Sensex has delivered a CAGR of 12%, a combination of 10 ‘Fastest Wealth Creators’ has multiplied investor wealth by a whopping 17 times, according to the study. “Rs 1,00,000 invested equally in 2013 in top 10 Fastest Wealth Creators would have grown to almost Rs 1.7 million in 2018, delivering a return CAGR of 75%,” noted the study.
Which are the fastest Wealth Creators? Indiabulls Ventures has emerged the Fastest Wealth Creator, with 2013-18 stock price multiplier of 30x (97% CAGR), Motilal Oswal said. After Indiabulls Ventures, Dalmia Bharat, TVS Motor, HEG, Sterlite Technologies, Bajaj Finance, Motilal Oswal, IIFL Holdings, NBCC, Eicher Motors are among the top 10 fastest stocks.
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Financials has emerged as India’s biggest Wealth Creating sector over 2013-18 for the second consecutive year. “In this study period, the Financials sector has the unusual distinction of being the biggest Wealth Creator (thanks to private banks and NBFCs) and the biggest Wealth Destroyer (thanks to state-owned banks),” said the study.
From the Sensex, private sector lender HDFC Bank shares have emerged as the biggest wealth creators for investors, ahead of Reliance Industries and TCS. “After consistently hugging the second and third rank for the last 6 studies, HDFC Bank has finally broken through to emerge the biggest Wealth Creator over 2013-18,” the report noted. HDFC Bank has created Rs 3,247 billion wealth in the last 5 years, while billionaire Mukesh Ambani-led Reliance Industries has created Rs 3,094 billion in the same period. India’s largest IT behemoth TCS grabbed the third spot creation Rs 2,532 billion. Automaker Maruti Suzuki came next on the list of biggest wealth creators, increasing investor wealth by Rs 2,308 billion.