Thanks to the strong market rally on Friday after the tax cut announcement, the country’s top business promoters have now recouped more than two-thirds of the losses that they suffered in the post-Budget sell-off in equity markets.
The combined net worth of promoters of top listed firms was up Rs 1.33 trillion on Friday, which is 69 per cent of the Rs 1.94 trillion that they lost between June-end and September 19, 2019. Data also suggests that many billionaires are better off than on the eve of the Union Budget that was presented on July 5, 2019.
Reliance Industries (RIL) Chairman Mukesh Ambani tops the list of gainers with nearly Rs 22,000 crore addition to his net worth post the tax-cut, thanks to a six per cent rally in the company’s stock price on Friday. Promoters’ stake in RIL is now worth Rs 3.67 trillion slightly up from Rs 3.66 trillion at the end of June this year.
Other big gainers from market movement after the tax cut include Radhakishan Damani of Avenue Supermarts (about Rs 7,100 crore), the three promoter families of Asian Paints promoters (around Rs 5,975 crore) and Bandhan Bank promoters’ (around Rs 5,200 crore).
Among major business houses, the biggest gains accrued to Bajaj family (Rs 3,100 crore), Hinduja (Rs 3,100 crore), Vedanta (Rs 2,600 crore), Sunil Bharti Mittal (Rs 2,500 crore), Pawan Munjal of Hero MotoCorp (Rs 2,400 crore) and Kumar Mangalam Birla of Aditya Birla group (Rs 2,200 crore).
The gains have, however, been lopsided with nearly two-thirds of the gains in wealth post the tax-cut accruing to 21 of 666 promoters in the Business Standard sample.
The tax cut saw few of the promoters suffering a decline in their net worth as stock prices of their companies corrected post the announcement. This includes Burmans of Dabur whose net worth was down Rs 1,542 crore on Friday followed by Infosys promoters (down Rs 870 crore) and Subhash Chandra family of Zee Entertainment down Rs 184 crore.
After Friday’s rally, India now has 73 promoters whose net worth is $1 billion or more, compared to 82 such promoters at the end of March this year. These promoters now have a combined wealth of $322 billion a gain of nearly $16.5 billion on Friday but down from $342 billion at end of June this year.
Nearly half of these billionaire promoters are now better off compared to their net worth at the end of June this year. Most of these head companies in consumer goods, retail lending and pharmaceutical sectors, which have seen a rally as investors moved to defensive stocks and away from cyclical stocks in the last two and half months.
The analysis is based on the promoters’ stake and market capitalisation of a common sample of 807 companies that are either part of BSE500, BSE MidCap or BSE SmallCap index.
The sample excludes government owned companies, listed subsidiaries of global multinationals, institution-owned companies and their subsidiaries such as Larsen & Toubro group, HDFC group, ITC, Axis Bank and ICICI Bank among others.
The sample has also been adjusted for separately listed subsidiaries of holding companies such as Reliance Industries, Tata Steel, Grasim Industries, Bombay Burmah, Reliance Capital, Bajaj Finserv, Godrej Industries and Mahindra & Mahindra, among others.
The value of promoters’ stake is net of cross-holding of various listed group companies in each other. The shareholding pattern and market capitalisation is at the end of June this year and March this year. The market capitalisation data is for the end of March, June and close of trading on September 19 and September 20. The net worth in dollar terms is based on the rupee-dollar exchange rate on the respective days.