These are the biggest wealth destroying stocks of 2018-2023

The stock market is often looked upon as a place where investors come to make money, but it is a well-known fact that equity market investments are risky and quite often investors could see their wealth erode as well.

The latest edition of Wealth Creation Study by market veteran Raamdeo Agrawal of Motilal Oswal Financial Services has listed the that destroyed investor wealth during the five-year period between 2018 and 2023.

The financial sector emerged as the top wealth destroying segment. The total quantum of wealth destroyed during 2018-23 was pegged at Rs 17.31 lakh crore with the financial accounting for as much as 30 per cent of the destroyed amount.

“Six of the top 10 wealth destroying companies are from the Financials sector including insurance,” stated the highly-followed report, with companies like Vodafone India, YES Bank, IOCL, Indiabulls Housing and IndusInd Bank emerging as the five biggest wealth destroyers.

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While the total quantum of wealth destroyed in the case of Vodafone India during 2018-23 was pegged at Rs 1.39 lakh crore, YES Bank and IOCL saw wealth erosion to the tune of Rs 58,900 crore and Rs 56,600 crore, respectively.

Companies like Bandhan Bank, Coal India, New India Assurance, General Insurance and Indus Towers completed the list of top 10 entities in terms of destroying investor wealth.

Meanwhile, apart from financials, sectors like telecom, oil & gas, consumer & retail and media also accounted for a significant chunk of wealth erosion.

However, the quantum of wealth destroyed as a percentage of the total wealth created during 2018-23 was pegged at 25 per cent, which was significantly lower than the COVID-hit period (2015-20) when it was as high as 130 per cent.

Incidentally, the previous five-year study period (2017-22) saw the share pegged at just 16 per cent.

Meanwhile, in terms of wealth creators, Reliance Industries emerged as the biggest wealth creator over the five-year period with the private sector major followed by TCS, ICICI Bank, Infosys and Bharti Airtel with the five firms collectively creating wealth totaling Rs 27 lakh crore.

In terms of sectors, technology emerged as the biggest wealth creating segment for the second successive year, followed by consumer & retail and financials.

The top 100 wealth creators of India Inc during 2018-23 created wealth of Rs 70.5 lakh crore, which was lower than the previous five-year period 2017-22 when it was 92.2 lakh crore.

Further, the pace of wealth creation at 21 per cent CAGR was also lower than the previous five-year period – 28 per cent -- but well higher than the BSE Sensex return of 12 per cent.

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