Rally makes promoters richer by Rs 4.40 lakh cr

Written by PK Dey | Mumbai | Updated: Nov 30 2009, 09:09am hrs
The stock market rally saw the wealth of the promoters of top 25 industrial houses increase by 139.6% (Rs 4.40 lakh crore) to Rs 7.55 lakh crore on November 25, compared to Rs 3.15 lakh crore on November 25, 2008. The Sensex also increased by 8,503.42 points (97.8%) to 17,198.95 from 8,503.42 on November 25, 2008, while the Nifty increased by 2,454.15 points (92.5%) to 5,108.15 from 2,654.00 points. An analyst from a rating agency said, The RBI measures and the dip in inflation helped lift investor confidence and FIIs increased their stake on a revived outlook for the Indian economy.

Among the 25 promoter houses, Om Prakash Jindal, Jaiprakash Gaur, Torrent, Sterlite, Mahindra, Bajaj, Godrej, Essar and Avantha showed a significant increase in terms of market capitalisation during the period. DR Dogra, MD & CEO, Care, said, With the improvement in global economies, equity markets across the globe have rallied in the past six months. FII inflows and investor confidence have resulted in many companies seeing price appreciation above 100%. Debt restructuring, new business guidance from the management, M&As and a positive outlook on the industries may be some of the reasons for the price increase of stocks.

The M-Cap of the promoters of Om Prakash Jindal group increased by 448.9% from Rs 9,062 crore on November 20, 2008 to Rs 49,744 crore on November 25, 2009 and the net profit of the group increased by 21.6% to Rs 976 crore during July-September 2009. However, the sales of group declined by 2.3%.

The M-Cap of the promoters of Jaiprakash group increased by 355.9% to Rs 16,949 crore on November 25 from Rs 3,717 crore on November 25,2008, while the net profit of Jaiprakash group increased by 245.1% to Rs 933 crore during July-September 2009 from Rs 270 crore during July-September 2008. The sales of the group also saw an increase of 48.7% during the period. Similarly, in the case of the Torrent group, the promoters M-Cap increased by 319.6% to Rs 10,504 crore on November 25,2009 from Rs 2,503 crore on November 25,2008. Here too, sales and the net profit of Torrent group went up by 28.6% and 91.9%, respectively, during the second quarter.

The promoter market capitalisation of Mahindra group companies increased by 291.6% to Rs 23,198 crore on November 25 from Rs 5,924 crore on November 25,2008 and the net profit of Mahindra group of companies increased by 77.5% to Rs 1,030 crore during July-September 2009. Sales of the group saw an increase of 22.9%.

The study analysed 25 promoters of major industrial houses and the closing share prices were computed from the official price lists published by The Stock Exchange Mumbai for November 25, 2009 and November 25, 2008.

Among the other groups studied, more than a 100% increase in M-Cap was seen in the case of Tata, Mukesh Ambani, Munjal Hero, Shiv Nadar, Subhash Chandra, Cadila, Ajay J Piramal, Sriram Thyagaraj, Rajan Raheja, KK Birla and the Murugappa Group. The lowest increase among the promoters of 25 industrial houses during the same period was registered in the case of ADAG and Kalyani. The promoter of the Tata group, which recorded the highest wealth among the 25 promoters, showed an increase of 152.7% on November 25.