Adani Group firms dominate list of top wealth creators in 2022; Paytm, Zomato bleed most

The latest list of ET 500 wealth creators and destroyers shows the emergence of brick-and-mortar companies at the top amid languishing new-age startup stocks. The list of wealth creators is dominated by four Adani group companies winning top slots while three out of the five wealth destroyers are from the startup ecosystem.

WEALTH DESTROYERS

One 97 Communications (Paytm)
Chairman & CEO: Vijay Shekhar Sharma
Mcap loss: 65.6%
Mcap: Rs36,737 cr

From being the country’s biggest IPO, Paytm ended up being the biggest wealth destroyer over the past year. Amidst net losses, investors have increasingly shown discomfort over the complicated business model of the financial services company. Heavy selling at the end of the one-year mandatory lock-in period in November for existing shareholders dented the stock price further.

Zensar Technologies
Chairman: Harsh Goenka
CEO: Ajay Bhutoria
Mcap loss: 52.7%
Mcap: Rs 4,918 cr

After a strong run in 2021, the software and digital services and products provider faced a sudden hit from macro challenges this year, which impacted client spending, especially from the consumer and hi-tech verticals. As a result, the projects got either cancelled or delayed, and order size got reduced. Wage hikes to reduce attrition also hurt.

Zomato
Chairman: Kaushik Dutta
CEO: Deepinder Goyal
Mcap loss: 51.3%
Mcap: Rs 55,871.84 cr

The first start-up that saw a bumper listing last year failed to retain investor interest. Concerns over the company’s business model sustainability, lack of sufficient data and financials shared in quarterly results and high valuations were major reasons behind the sharp fall in the stock price

FSN E-Commerce Ventures(Nykaa)
Chairman and CEO: Falguni Nayar
Mcap loss: 50.8%
Mcap: Rs 55,871 cr

The largest beauty and cosmetic products e-tailer reported a fall in profit after listing. With other large online players such as Ajio, Tata Cliq and Myntra aggressively entering the cosmetics segment, analysts have turned cautious over the company’s future earnings potential. Continuing losses from the fashion segment are also hurting the overall profitability.

Gland Pharma
Chairman: Yiu Kwan Stanley Lau
CEO: Srinivas Sadu
Mcap loss: -50.7%
Current Mcap: Rs 28,959 cr

The Chinese-owned pharma company has been seeing a sharp decline in profits due to the value erosion of some of its products in its major markets such as the US and Europe over the past few quarters. An undervalued stake sale by its Chinese promoter entity Fosun Pharmaceutical industries, followed by an earnings and RoE (return on equity) dilutive acquisition of Cenexi, has added to the investor concerns.

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WEALTH CREATORS

Adani Power
Chairman: Gautam Adani
MD: Anil Sardana
Mcap gain: 226%
Current Mcap: Rs 1.31 lakh crore

Adani Wilmar
Chairman: Gautam Adani
CEO: Angshu Mallick
Mcap gain: 148.3%
Current Mcap: Rs 85,589 cr

Adani Enterprises
Chairman: Gautam Adani
CEO: Rajesh Adani
Mcap gain: 146.4%
Current Mcap: Rs 4.45 lakh crore

Adani Total Gas
Chairman: Gautam Adani
CEO: Suresh Manglani
Mcap gain: 134.3%
Current Mcap: Rs 4.08 lakh crore

Adani Group Companies:
2022 brought on the unparalleled rise of the Adani Group with sharp returns by the majority of the group companies. Of these, Adani Power, Adani Wilmar, Adani Enterprises and Adani Total Gas emerged as the largest four wealth creators in the ET500 list. A turnaround after almost a decade in the power business, thanks to the surge in power demand from recovery in economic activity, massive investments in several new businesses such as data centres, airports, road and water infrastructure, defence and aerospace, solar and digital technology services and rise in gas prices contributed to this phenomenal performance.

CG Power
Chairman: Vellayan Subbiah
CEO: Natarajan Srinivasan
MCap Gain: 93.4%
Mcap: Rs 40,650 crore

The electrical equipment maker went through a complete turnaround after it was acquired by the Murugappa group in 2020. The company has been consistently delivering double-digit revenue growth with improving profitability helped by consistent revenue from railway contracts, a better product mix and enhanced cost controls.

Hindustan Aeronautics:
Chairman and MD: C B Ananthakrishnan
MCap Gain: 92.5%
MCap: Rs 87,527 cr

The company was a major beneficiary of structural reforms in the defence sector. It is a dominant supplier of aircraft, helicopters, engines, avionics and accessories, as well as the main provider of maintenance, repair and overhaul services to the Indian defence forces. It has been delivering robust growth in revenue with high margins. Its order book was at Rs84,000 crore at the end of the first half of FY23.

Schaeffler India
Chairman: Avinash Gandhi
CEO/MD: Harsha Kadam
Mcap gain: 88.48%
MCap: Rs 45,644 cr

With the Indian auto industry picking up steam, the major ball and bearings manufacturer is the best-performing auto stock over the past year helped by a sharp increase in revenue. Earlier known as Fag Bearings, it benefited from the major capital expenditure from the German parent which acquired it in 2018 and also from the integration of other Indian operations of the parent’s Indian subsidiary. The company is further ramping up capacities under the PLI scheme, which will enable it to localise several of the parent company’s newer products for both export and electrical vehicle segments.

Varun Beverages
Chairman: Ravikant Jaipuria
CEO: Kapil Agarwal
MCap Gain: 85%
MCap: Rs 74,318 cr

Pepsico’s second-largest franchisee in the world for carbonated and non-carbonated beverages, Varun has been registering strong growth over the past few quarters on all fronts, making it the best-performing consumer stock. Efforts taken to increase distribution and penetration over the past two years in Indian markets paid well. However, the major boost came from the company’s energy drink product — ‘Sting’, which has 65% higher realisation than other products and a much higher margin. The share of this category has increased from less than 9% a year ago to 12% currently.

METHODOLOGY:
Change in average market capitalisation from November 2021 to November 2022 has been used to select the companies. Only companies with an average market cap of more than Rs 10,000 crore in November 2021 have been considered.