Slide in value of the 30 shares, which constitute the benchmark stock market index BSE Sensex, from their respective yearly peak values has seen investors? notional wealth worth Rs 19,32,958 crore go up in smoke. This, since crisis in the secondary market deepened following the global financial downturn.
Leading the pack of Sensex scrips which shaved off investors? notional wealth significantly are real estate biggies Jaiprakash Associates and DLF, followed by Tata Steel, Sterlite Industries and Reliance Infrastructure Ltd.
According to analysts, most Sensex stocks are currently trading below their respective yearly lows or hovering around that level, putting a big question mark over fund flow towards the secondary market in the near future. “They were, and are the bluest of blue chips and form part of any investment banker?s portfolio. The current slide in these stocks indicates that the market is in the grip of fear bordering paranoia and it may take some more time to recover,” said an analyst with a foreign brokerage house.
“The tanking off Sensex stocks is mainly due to factors external to respective companies, like pullout of foreign funds en masse from emerging markets and a weak rupee. The fundamentals of these stocks have not changed, though some of them may show a less-than-expected performance in the coming quarters due the global scenario,” said a fund manager with a local mutual fund house, who did wish to be named.
“The most hammered among index stocks are from real estate and related sectors. This is on predictable lines, as these are the most overheated sectors and a correction was due,” he added.
According to a calculation done by FE, Jaiprakash Associates has taken the biggest hit. Its market capitalisation has tanked by almost 89% to Rs 6,794.73 crore, based on the closing price of its stock on Tuesday. In absolute terms, this translates to a loss of Rs 53,043.18 crore compared to its market capitalisation of Rs 59,837.91 crore, based on its 52-week high price.
Similarly, another real estate company DLF has lost close to 85% of its market capitalisation. It was Rs 32,502.97 crore, based on Tuesday? closing price. Market capitalisation of Tata Steel, which made significant acquisitions in the recent past including that of UK steel maker Corus, slipped by 84%. Others including ICICI Bank, Tata Motors, Grasim Industries, Reliance Communications Ltd, Mahindra and Mahindra, ACC Ltd, Ranbaxy, Hindalco, Reliance Industries Ltd, Tata Power and Wipro Ltd lost over 50% of their market capitalisation compared to their yearly highs.
RIL, the country?s largest corporate house in terms of sales and market capitalisation, has seen its market-cap erode from a yearly high of Rs 4,79,459.14 crore to Rs 1,80,191.09 crore.