NEW DELHI: There is a life beyond Sensex and Nifty50 for equity investors. Many stocks that are not constituent of these fancy indices have ended up rewarding investors with up to 130 per cent returns in 2016.
Among them, 10 swelled investor wealth by a whopping Rs 2 lakh crore during the year. This equals the amount by which BSE’s total market capitalisation rose during the year. The BSE universe has over 5,000 listed stocks around this point of the year.
Many frontline stocks such as Sun Pharma, TCS, Infosys and Coal India – which are on top of the BSE list in terms of market capitalisation (m-cap) – failed to deliver, weighing on the total wealth created by domestic stocks during a challenging year. This is evident in the fact that 30 Sensex stocks alone account for 44 per cent of BSE’s total market capitalisation. The index is flat year-to-date.
Data showed commodity and financial stocks topped the list. Oil marketing company IOC topped the chart. The stock jumped 43.49 per cent and added Rs 45,269 crore to its market capitalisation during the year.
It is followed by metal stocks Hindustan Zinc and Vedanta, which rallied 70 per cent and 130 per cent, respectively, and added about Rs 78,500 crore to their m-cap in 2016.
HPCL has seen its shares rise 48 per cent while its market-cap has swelled by Rs 13,684 crore in 2016.
“In the last one month ever since Donald Trump’s surprise win in the US presidential election, the common wisdom around the market is that Trump and his administration would invest a lot on infrastructure creation in order to kickstart the US economy, which can only be positive for commodities,” said Ajay Tyagi, EVP & Fund Manager (Equities), UTI Mutual Fund.
“But the fact remains that the kind of supercycle that we saw in the previous decade cannot be replicated at least over the next 5 to 10 years, because that happened on account of this huge demand from China, which was spending a large amount of money on infrastructure creation. This cannot be replicated by the US over the next two or three years,” Tyagi said.
Piramal Enterprises and Biocon rallied 46 per cent and 73 per cent, respectively, and adding Rs 15,000 crore in total to investor wealth.
Sun Pharma, TCS, Infosys, Coal India and Wipro were top wealth destructors (in m-cap terms) for investors in 2016. These five stocks lost anywhere between 6 per cent and 25 per cent and eroded Rs 1.62 lakh crore worth of investor wealth.