Stock rally adds `50-lakh crore to investor wealth in 3 years

The country's stock market wealth has grown by nearly Rs 50 lakh crore in three years since the Modi government was voted to power, with huge gains of over Rs 1 lakh crore each for big corporates like Tata, Birla, Ambani and Bajaj groups.

Financial sector and industrial conglomerates like HDFC, ICICI, L&T, Vedanta, Godrej, Mahindras, Hinduja and ITC have also gained big with a sharp jump in their market valuations during this period, which is being termed by some market experts as the 'Modi Rally'.

At the same time, the gains have been relatively 'uneven' for the public sector companies with some of them actually seeing a dip in their investor wealth while others have registered a huge jump.

The overall gain for state-run companies forming part of the BSE PSU index is estimated at about 22 per cent or Rs 3.65 lakh crore -- which is less than 8 per cent of the total three-year gain of about Rs 50 lakh crore for the across-the- board stock market wealth since the NDA alliance was voted to power in May 2014.

The PSUs as such account for over 16 per cent of the overall stock market wealth in India.

An analysis of the stock market movements in this period shows that the stock market benchmark Sensex has gained over 6,000 points or nearly 26 per cent, while the overall stock market has grown from little over Rs 75 lakh crore to more than Rs 125 lakh crore now.

The experts, however, flagged that a big chunk of these huge gains are actually in the accounts of the promoters themselves, while foreign portfolio investors and domestic institutional investors have got the next biggest share.

The average shareholding of retail investors in Indian companies is relatively less at less than 10 per cent and therefore their share in the overall gains would be relatively smaller.

As per a survey commissioned by the capital markets regulator Sebi, just about 8 per cent households in urban India invest in stocks while those investing in mutual funds are also less than 10 per cent. The rural households have less than 1 per cent investors.

The situation is so bad in rural areas that just 1.4 per cent are aware about stocks and mutual funds.

In these three years, Mukesh Ambani-led Reliance Industries has gained nearly Rs 1 lakh crore in market capitalisation –the total value of all listed shares –to about Rs 4.5 lakh crore with a gain of about 30 per cent.