The market cap of the Bombay Stock Exchange (BSE), which touched a level of Rs 46,03,886 crore on July 24, 2007, is now down by Rs 3,26,538 crore to Rs 42,77,348 crore on August 16,2007. Around Rs 1,64,945 crore of shareholder wealth was eroded in Thursdays fall alone, when the Sensex fell 642.7 points to touch 14,358.21 .The market capitalization to gross domestic product (GDP) ratio has also decreased from earlier 124.4% when the Sensex reached the highest level on July 24 to a lower level of 115.6% on Thursday.
FII played the key role, selling heavily in A-group shares across various industries including aluminium and products, telecommunications, automobiles LCVs/HCVs/Passenger cars,construction, cement and products, software, hardware, engineering, private sector banks, steel, and oil & gas.
DR Dogra, ED, Care Ratings said, The market is expecting further damage from the sub-prime credit crisis in the US market. Market operators believe that some more hedge funds could loose money. It is, therefore, expected that some more FII money may be sucked back from the Indian market which is adversely effecting the sentiment in the stock market. It also follows the pattern of stock market movements in other Asian markets.
The aggregate market capitalisation of the Bombay Stock Exchange (BSE) A group shares decreased by an amount of Rs 3,17,468 crore (-8.92%) on August 16 , 2007, which came down from Rs 35,57,349 crore as on July 24, 2007 to Rs 32,39,881 crore as on August 16,2007.
Companies that were major losers in terms of market cap since July 24, 2007 include Hindalco Industries (Rs 1,560 crore), Tata Steel (Rs 8,670 crore), Suzlon Energy ( Rs 8,670 crore), GMR Infrastructure (Rs 5,731 crore), M&M (Rs 3,295 crore), JSW Steel(Rs 2,009 crore) and ONGC (Rs 20,684 crore).
Furthermore, sector-wise analysis indicates that aluminium and products (18 units) showed significant decrease in M-Cap on August 16, 2007, declining 16.8%, followed by telecommunications (-14.0%), construction (-13.4 %), engineering (-11.61%), electronics (-10.3 %), shipping (-7.9 %) and retailing (-6.7%).
Among aluminium , highest decrease in M-Cap was witnessed by Hindalco Inds (-22.1%) followed by National Aluminium(-13.0%).
Among private banks, significant decrease in M-Cap was witnessed by ICICI Bank followed by Indusind Bank.
In the telecommunications (27 units), significant decrease in M-Cap was registered in the case of Bharti Airtel (-14.01%) followed by MTNL (-13.71%). The M-Cap of Bharti Airtel decreased from Rs 1,76,843 crore on July 24,2007 to Rs 1,51,933 crore on August 16, 2007.
Among the 12 shipping companies , significant decrease in M-Cap was shown by SCI (-16.5 %). Among the 208 A group stocks, increase in M-Cap was seen only in the case of 30 companies during the study period. Mention may be made of Ballarpur Industries, IDBI, Dredging Corp, Thermax, EIH and Asian Paints.