Massive wealth erosion at top biz houses

Written by Pradip Kumar Dey | Mumbai, Oct 6 | Updated: Oct 7 2008, 05:41am hrs
In the current calendar year, the wealth of Indias top 25 industrial houses decreased 50.3% to Rs 9.61 lakh crore. As the credit crisis deepens in the US and Europe, investor wealth is rapidly eroding with the Sensex losing 41.9% this year alone. From above 20,000 levels in January, the benchmark index has plunged to 11,800 levels on Monday.

Dinesh Thakkar, CMD, Angel Broking, said, The markets are near their bottom. So a further correction to the tune of 5% cannot be ruled out. I feel the market will take support at 11,000 and bounce back to achieve a sustained growth of 15 to 20% per annum. The market capitalisation of Jaiprakash, Sterlite, Essar and Hinduja declined significantly this year. The M-cap of Jaiprakash group dropped the most by 76.34% to Rs 12,171 crore. Among the Jaiprakash group companies, Jaiprakash Associates suffered the most. Sterlite Industries led the fall in its group companies M-cap which dipped 63.5% to Rs 41,165 crore.

A lot of wealth that was created in the market upswing is being wiped out in the current market meltdown. As the subprime crisis that originated in the US is spreading to Europe, foreign institutional investors are pulling out money from emerging markets. In the present mayhem in the stock market, only one business house, Hero-MB Lall showed an increase in M-Cap as of Monday, 19.5%, from the level of January.