The stock markets are crashing, NAVs of mutual funds are falling as if there is no bottom, directors of stock exchanges are accused of indulging in insider trading, banks are pulling down their shutters - simply nothing seems to be working in favour of small investors. The hapless investor is left in the lurch.

Even the government appears to dance to the tunes of powerful pressure lobbies. Since small investors are too amorphous to band together, they just have no clout with the powers that be. The reduction in interest rate on small savings in the Union Budget certainly does not augur well for them.

Having burnt their fingers by playing on the bourses directly, the small investors invested in mutual funds under the influence of leading investment gurus and fund managers. The falling NAVs have added to their discomfiture, as this investment has also failed to generate any return. So now, it looks as if the talk about value-investing by experts is little more than corporate shibboleth.

The investors who trusted the banks with their money also had their share of problems. The Madhavpura Co-operative Bank has been ordered to shut down its normal operations by the RBI. It is alleged that the bank had a huge exposure to the stock markets, which resulted in huge losses. Some leading private sector banks are also exposed heavily to the capital market. Even in this case, the loser is again the small investor.

Investment schemes like PPF, post office savings scheme etc, which are backed by the government are the only safe avenues where money can be parked. But are they worth investing? With a reduction in interest rate to 9.5 per cent, the PPF investment would just keep the investor up with inflation.

What should these investors do in a situation like this? The stock markets, mutual funds, banks and government saving schemes have all failed to provide any relief to them.

The only option now available to them would be to withdraw their money and keep it at home. However, even this option is not foolproof. Who would protect the investors from physical burglary? Tough days seem to be ahead for the small investors.

Drug prices
The recent price revision of some of the important drugs is a step towards bringing about parity in drug prices before the DPCO is dismantled, apart from imparting stability to he market.

Prices of a range of Penicillin-G have been reduced substantially - Penicillin G by 29 per cent to Rs 727 per kg, Sodium Penicillin G by 37 per cent to Rs 1094 per kg, Benzethin Pen G by 20 percent to 2591 per kg and Procain Penicillin G by 28 per cent to Rs 1323 per kg. Besides the Penicillin , anti-ulcerant, Ranitidine HCL will cost less 16 per cent less at Rs 1061 per Kg. Lower prices of Penicillin G will affect Alembic Chemicals, Ambalal Sarabhai and JK Pharmachem. A large number of downstream manufacturers of penicillin products stand to benefit. Penicillin is widely used in the manufacture of antibiotic drugs such as Ampicillin, Amoxycillin, Azlocillin and Cloxacillin, products used for most common infections. These products had already hit low price levels to prevent even a small margin on their manufacture. In fact, many small scale manufacturers of ampicillin and amoxycillin had closed down because of uneconomical production. There are more than 52 manufacturer of Amoxycillin and 70 manufacturers ofAmpicillin.

Most of these bulk drugs are manufactured by intermediaries and not by manufacturers of formulations. During the last three years, prices of Ampicillin have declined from Rs 2950 per kg to Rs 1725 per kg. and those of amoxycillin from Rs 3050 per kg to Rs 1925 per kg. Aurobindo Pharma is a major manufacturer of downstream products. Drug majors such as Cipla, Alkem, Ranbaxy and Unichem make drugs using penicillin. Their product portfolio has many brands in the basic formulations and their different combinations. Total market for ampicillin and amoxycillin is more than Rs 900 crore.

Prices of Ranitidine, an anti-ulcerant, have been slashed too. Glaxo, Cadila, Unique, Ranbaxy and Lupin are among the 18 major manufacturers of the formulations. Glaxo's Zinetac is the largest selling brand made from Ranitidine. Prices of dettol and insulin have been revised too - Dettol's up by 5.6 per cent, of insulin dirutic spironolatone 48.2 per cent and that of other insulin by 21.9 per cent. Knoll Pharma is the largest manufacturer of insulin and will greatly benefit from this increase.

Prashant Kothari & Dhruv Rathi