Pradip Kumar Dey
FE Research Bureau

WITH heavy the selloffs in IT stocks, fuelled by lower-than-expected Q4 results announced by Infosys Technologies, the market capitalisation (M-cap) of 175 A-Group shares has declined by 4.34 per cent on Wednesday.

The M-cap of these companies declined by Rs 18,169 crore to Rs 4,00,645 crore as on April 11, 2001 from Rs 4,18,814 crore as on April 10, 2001.

The highest decline was registered in the case of Infosys Technologies (16.00 per cent) followed by Wipro (16.00 per cent), SSi (15.99 per cent), HCL Tech (15.99 per cent), Zee Tele (15.96 per cent), Digital Equipment (15.71 per cent), HFCL (15.51 per cent), Hughes Soft (15.32 per cent) and Satyam Computer (15.20 per cent).
However, it would be a mistake to ascribe all the downturn to IT companies. Consider Essel Packaging, which declined by 16 per cent or Sterlite Optical, which declined by 8.21 per cent. Several pharma companies also recorded significant decline, reflecting the nervousness of the market.

The M-cap of Infosys Technologies declined from Rs 25,510 crore on April 10, 2001 to Rs 21,428 crore on April 11, 2001, despite a significant increase in net profits during the fourth quarter. The net profit of the company increased by 94.48 per cent to Rs 181.68 crore during Jan-Mar 2001 from Rs 93.42 crore during Jan-Mar 2000.

Almost all A-group companies’ M-cap has declined during the study period except that of SBI, HDFC Bank, ICICI Bank, Bhel, Castrol, Bajaj Auto, Cummins India, Procter&Gamble, Novartis, Tata Chemical, GE Shipping, United Breweries, Ingersoll Rand, Apollo Hospital, Mirc Electronics, Philips India and Crisil.

Among these, the highest increase in M-cap was witnessed in the case of GE Shipping, which rose 6.87 per cent to Rs 684.63 crore on April 11, 2001 from Rs 640.63 crore on April 10, 2001.

In all, 175 A-group shares have been considered. The share prices have been computed from the official price lists of the BSE. Only two days time period quotations are considered. The top five in terms of M-cap in the descending order on April 11, 2001, were HLL (Rs 47,071 crore), Reliance Ind (Rs 33,860 crore), RPL (Rs 26,077 crore), Infosys (Rs 21,428 crore) and Wipro (Rs 20,808 crore).

On the other hand, the bottom five, in ascending order, in terms of M-cap on April 11, 2001 were Supreme Ind (Rs 52 crore), Atlas Copco (Rs 59 crore), Bausch&Lomb (Rs 61 crore), Crisil (Rs 71 crore) and Esab (Rs 72 crore).