Wealth destroyers of Dalal Street: These 10 stocks burned nearly Rs 3 lakh crore in last 5 years
, ETMarkets.com|
Updated: Dec 12, 2017, 02.53 PM IST
NEW DELHI: Indian equity market has been in top form over the last few years. Since December 14, 2012, the BSE Sensex has zoomed by a massive 13,862.81 points or 71.37 per cent till date.
Since the end of the financial year 2012, the market capitalisation of all the BSE-listed companies has more than doubled. The figures stood at Rs 147 lakh crore as of December 11, 2017 against Rs 62 lakh crore at the end of FY12.
However, few sectors and stocks have let investors down on Dalal Street in a big way.
A total of Rs 6 lakh crore has been destroyed in the last five years. Out of this, top 10 stocks have made investors poorer by nearly Rs 3 lakh crore alone, a report by Motilal Oswal showed.
However, the quantum and the percentage of destruction are much lower than in the previous two periods taken for review (2010-2015, 2011-2016).
The Rs 6 lakh crore lost during 2012-17 is equal to 15 per cent of the total wealth created by top 100 companies, the data showed.
In terms of wealth destroyers among sectors, metals or mining sector came on top followed by trading, banking & finance and real estate.
Delving deeper into details, MMTC topped the wealth destroyers' list by eroding Rs 72,200 crore, followed by Jindal Steel (Rs 39, 300), Coal India (Rs 34,900 crore), BHEL (Rs 230 crore) and NMDC (Rs 219 crore).
Shares of the trading firm MMTC have plunged 90 per cent in last five years, while those of Jindal Steel and Coal India have tumbled 60 per cent and 27 per cent, respectively.
According to the research report, the broader theme of wealth destruction was the cyclical downturn.
A cyclical industry is a type of industry, which is sensitive to the business cycle, such that revenues are generally higher in periods of economic prosperity and expansion and lower in periods of economic downturn and contraction, explains Investopedia.
The brokerage firm notes that the favorable global commodity cycle coupled with aggressive domestic capex (mainly by the Indian government) are likely to herald at least near-term upturn for cyclicals. "However, predicting the next downturn is challenging. Thus, the only safe way to play cyclicals is to buy them cheap during the downcycles."
Since the end of the financial year 2012, the market capitalisation of all the BSE-listed companies has more than doubled. The figures stood at Rs 147 lakh crore as of December 11, 2017 against Rs 62 lakh crore at the end of FY12.
However, few sectors and stocks have let investors down on Dalal Street in a big way.
A total of Rs 6 lakh crore has been destroyed in the last five years. Out of this, top 10 stocks have made investors poorer by nearly Rs 3 lakh crore alone, a report by Motilal Oswal showed.
However, the quantum and the percentage of destruction are much lower than in the previous two periods taken for review (2010-2015, 2011-2016).
The Rs 6 lakh crore lost during 2012-17 is equal to 15 per cent of the total wealth created by top 100 companies, the data showed.
In terms of wealth destroyers among sectors, metals or mining sector came on top followed by trading, banking & finance and real estate.
Delving deeper into details, MMTC topped the wealth destroyers' list by eroding Rs 72,200 crore, followed by Jindal Steel (Rs 39, 300), Coal India (Rs 34,900 crore), BHEL (Rs 230 crore) and NMDC (Rs 219 crore).
Shares of the trading firm MMTC have plunged 90 per cent in last five years, while those of Jindal Steel and Coal India have tumbled 60 per cent and 27 per cent, respectively.
According to the research report, the broader theme of wealth destruction was the cyclical downturn.
A cyclical industry is a type of industry, which is sensitive to the business cycle, such that revenues are generally higher in periods of economic prosperity and expansion and lower in periods of economic downturn and contraction, explains Investopedia.
The brokerage firm notes that the favorable global commodity cycle coupled with aggressive domestic capex (mainly by the Indian government) are likely to herald at least near-term upturn for cyclicals. "However, predicting the next downturn is challenging. Thus, the only safe way to play cyclicals is to buy them cheap during the downcycles."
