M-cap of 175 A-group rolling shares down Rs 14,798 cr in a day

Pradip Kumar Dey, FE Research Bureau

With the deadly terrorist attacks on the US and sharply fearing a cascading impact on the Indian economy, which is already under pressure due to global gloom the market capital of 175 A-group rolling shares declined by 3.78 per cent within a day.

The market capitalisation of the above number of companies declined by Rs 14,798 crore to Rs 3,76,890 crore, as on September 12,2001 from Rs 3,91,688 crore as on September 11, 2001.

Mostly, IT companies are badly hit during the day. The highest decline was registered in the case of Shyam Telecom (18.04 per cent) followed by Global Tele-System (14.96 per cent), Polaris Software (14.56 per cent), Silverline (14.25 per cent), Pentamedia Graphic (13.44 per cent), SSI (13.36 per cent), Sonata Software (13.30 per cent), PSI Data Systems (12.72 per cent), Aptech (10.76 per cent) and Apollo Hospital (10.40 per cent).

However, it would be a mistake to ascribe all the downturn to IT companies. Consider Saw Pipes, which declined by 9.27 per cent or TVS-Suzuki which declined by 7.72 per cent. Several PSUs also recorded significant decline, reflecting the nervousness of the market.

The market capital of Shyam Telecom declined from Rs 121.39 crore on September 11, 2001 to Rs 99.50 crore on September 12, 2001 despite a significant increase in net profit during the first quarter. The net profit of the company increased by 66.3 per cent to Rs 3.01 crore during April-June 2001 from Rs 1.81 crore during April-June 2000. Almost all the A-Group (rolling) companies’ market cap has declined during the study period except that of ITC, Dr Reddy’s Lab, Sun Pharma, Gujarat Ambuja Cement, Glaxo, Britannia, Wockhardt, Pfizer, Punjab Tractor, MRF, Shree Rama, Rayban Sun, GSFC, Trent and Supreme Industries.

Among these, highest increase in market cap was observed in the case of Shree Rama, which rose by 8.35 per cent to Rs 147.76 crore on September 12, 2001 from Rs 136.37 crore on September 11, 2001. Now for the details of the study. In all, 175 A-group (rolling) shares have been considered. The share prices have been computed from the official price lists of the BSE. Only two time period quotations are considered.

The top five in terms of market capitalisation in the descending order on September 12, 2001 were Hindustan Lever (Rs 45277.35 crore), Wipro (Rs 33,963.60 crore), Reliance Industries (Rs 31,567.30 crore), Infosys Techno (Rs 21,034.58 crore) and Reliance Petro (Rs 16,776.45 crore). Maximum decline in market capital among the top five companies was observed in the case of Infosys Techno (-9.19 per cent) followed by Reliance Petro (-7.19 per cent).