In 2017's bull run, 20 stocks destroyed investor wealth the most

Around 20 stocks in BSE 500 companies lost between 10 and 69 percent, thereby eroding a significant chunk of their portfolio.

Fresh milestones for indices, healthy returns, and strong brands getting listed are attributes that can be associated with the Indian market this year.

The Nifty, in July, clocked 10,000 for the first time ever, followed by 10,500 which was breached in the past few sessions. The Sensex, on the other hand, on December 26, hit 34,000 for the first time.

But, the rally is not over yet as most experts believe that Nifty is likely to scale Mount 11K in the year 2018, according to a poll conducted by Moneycontrol.com.

Moreover, the indices returned between 27 and 28 percent on a year to date basis, ensuring that investors had a good year of wealth creation.

The good run can also be deduced from the fact that the Sensex and Nifty were the second-best performers among global markets. The Hang Seng returned 33 percent on a year to date basis.

There were stocks such as Avenue Supermarts, which doubled investors’ wealth in the first few minutes of trade, whereas Maruti Suzuki hit Rs 10,000 for the first time.

But not all is well for investors of some of the biggest wealth destroyers. Around 20 stocks in BSE 500 companies lost between 10 and 69 percent, thereby eroding a significant chunk of their portfolio.

As the table goes, names such as Reliance Communications, Sun Pharmaceuticals, Tata Motors, Dr Reddy’s Laboratories, Glenmark, Lupin, and Sintex Industries, among others lost the most this year. Interestingly, nine out of the top 20 wealth destroyers belong to healthcare sector.

Sintex was the top loser, falling 69 percent, Reliance Communications and Lupin, which fell 52 and 41 percent.

Looking at this data from a 10-year perspective also throws up some other trends. For instance, stocks such as Sintex, Reliance Communications, Siti Networks, Bank of Maharashtra, Aban Offshore, and IDBI Bank have all given double-digit negative returns in the past 10 years. So, there is a good chance that if you have held these stocks in the past decade, it would not have made investors happy.

Going forward, experts do see better times for the market, but they also caution on some downside risks.

Indian markets will attract global attention once earnings growth visibility improves. So much wealth creation has happened globally across markets, typically some part of that wealth has the potential to get allocated to emerging markets like India, though it is difficult to gauge the timing or extent of that. Among downside risks, he believes macro story not playing out and earnings cycle taking longer time to revive could hit the market.

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