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Wealth creation, India Inc way!
B G Shirsat | March 27, 2006
The market value of listed companies of India Inc hit Rs 29.11 trillion (Rs 29,11,000 crore) on March 24, 2006 - an increase of Rs 12 trillion (Rs 12,00,000 crore) in the past 12 months when compared with Rs 17.08 trillion (Rs 17,08,000 crore) the same time last year.
Look at the growth trajectory - an increase of Rs 5 trillion in FY04 followed by Rs 9 trillion in FY05 and Rs 12 trillion in yet-to-finish FY06!
Wealth creation by India Inc has been on the fast lane on the conviction of foreign institutional investors of the India story. The major contribution of wealth creation came from 102 companies, which are now members of the $1 billion market cap club. The $1 billion club, which has increased by 31 members in the last one year, added almost three-fourth or Rs 8.9 trillion gained in the last one year.
The major new entrants in the $1 billion club are Suzlon Energy ($8.55 billion), Reliance Communication Ventures ($7.95 billion) and i-Flex Solutions ($2.35 billion).
Suzlon created wealth through a public offer, Reliance Communication Ventures through the demerger of Reliance Industries and i-flex via a 139 per cent increase in valuation.
An interesting angle
Major value creators in the last one year are the 2000-odd, self- made entrepreneurs or professional managers. Nearly 2,035 companies, which do not belong to any business group, increased investors' wealth by Rs 4.30 trillion (up 91 per cent) to Rs 9.07 trillion. Of the 2,000-odd companies, as many as 440 have increased their shareholders' wealth by over 100-5000 per cent!
Public sector enterprises come second in the wealth creation league with 69 PSUs in the banking and manufacturing sector adding Rs 2.31 trillion in the last one year.
The Tata group, the biggest group in the private sector on market cap, added Rs 70,000 crore (Rs 700 billion) to investors' wealth in the last one year to take its market cap to Rs 2.08 trillion.For the Mukesh Ambani group, wealth creation was modest at Rs 18,553 crore (Rs 185.53 billion) largely on account of the demerger of Reliance Industries. His brother, Anil Ambani, unlocked Rs 55,000 crore (Rs 550 billion) through the four demerged entities of RIL, and thereby took his group wealth to Rs 71,600 crore (Rs 716 billion).
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