A important catalyst for stock re-rating is a change in the CEO. According to data, since 2022, when a new CEO took office, around 85% of BSE 500 Companies have produced positive profits.
As per a report by CNBC TV the stocks of most companies have showed positive performance after a CEO change. The top performers in this regard were RBL Bank, IRFV, Suzion and Adani Power.
IRFC has surged by 260% since its CEO changed in October, 2022. Adani Power has grown 240% since its top leader changed.
Union Bank of India, Aditya Birla Capital, BSE and Zensar Tech have also followed similar trends and recorded massive gains in the stock market after the appointment of new CEOs.
However, there are also some companies whose stock prices had just plunged after the leadership change. A few among these are Jubilant Foodworks, Quess Corp, Easy Trip Planners and Granules India.
Given the case in most companies, it seems like investors tend to reward leadership changes. It may be because they believe that new CEOs would have newer styles of working that is in congruence with the modern world and the latest tech developments.