Thanks to the gains in PSU stocks, it is the government that has made the most of the recent rally

It’s not just institutional investors that have had a rollicking time in the stock markets. From last year’s low to date, India Inc’s promoters have added ₹11.7 lakh crore to their personal wealth, thanks to a 37 per cent gain in the market capitalisation of the shares they own in listed companies.

It was the Centre that raked in the lion’s share of these gains, with public sector stocks catching the market’s fancy.

Thanks to its holdings in the PSUs, the government’s market wealth swelled ₹4.6 lakh crore between last September and now, a 56 per cent gain. So, the new Government has reason to be grateful for the delay in the divestment programme. Had more PSU stakes been sold, the addition to the Government kitty would have been lower.

The Government holding in banks alone has doubled in market value. Similarly, oil stocks — HPCL, BPCL, and IOCL — were on fire, as were Engineers India, BEML, NBCC, and PowerGrid.

Private sector promoters

Among the private sector promoters, the Adani group scored really big. Though it has just three entries in the listed space — Adani Enterprises, Adani Power and Adani Ports — the group doubled its promoters’ wealth in the last eight months. The value of promoter holdings in the Adani stocks was up ₹43,762 crore in this period.

The Tatas were significant gainers too, with the market value of the promoters’ stakes up ₹51,097 crore.

But considering that the Tata group has 24 stocks in the listed space, compared to Adani’s three, this is a modest gain. The Tata group stocks have recorded a 14 per cent rise from last year’s low. Anil Agarwal’s Vedanta group served up a ₹25,539-crore addition to its promoter’s wealth, a 25 per cent gain.

Not much for MNCs

Multinational giants, on the other hand, lost out on these stellar gains as they were present mainly in sectors such as FMCG, chemicals, hotels, and pharmaceuticals, which were nowhere close to the best performers. As a result, collective gains in the wealth of the foreign promoters were a modest 28 per cent, or about ₹96,350 crore.

The fortunes of different business houses were largely sectorally determined. Infrastructure and related sectors helped the Adanis as well as the Jaypee group promoters, the latter gaining ₹5,307 crore.

A similar bias saw a 108 per cent rise in market cap for the JSW Group. The rally also left the Kalyani group wealthier, with a rise in prices of Bharat Forge and Automotive Axles.

Godrej saw its promoters gain a mere 4 per cent in this rally as Godrej Consumer and Godrej Industries failed to excite markets. Similarly, the sedate performance by Idea Cellular and Aditya Birla Nuvo moderated gains for the Aditya Birla group to 28 per cent.

Despite pocketing significant gains from this rally, India Inc’s promoters were not bullish about their group companies. Even as the market bolstered their wealth, they sold some shares.

The total promoter holding for 1,200 NSE-listed companies has dropped slightly to 52.5 per cent in the March 2014 quarter from the 52.7 per cent at end-September 2013.

This analysis used the change in shareholding patterns of companies between September 30, 2013 and March 31, 2014 to arrive at these numbers.

(This article was published on June 1, 2014)
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