Wealth of top 25 industrial houses dwindles by 64%

Written by Pradip Kumar Dey | Mumbai, Nov 14 | Updated: Nov 16 2008, 03:49am hrs
Though Reliance Industries chairman Mukesh Ambani became the richest Indian replacing Lakshmi Mittal in terms of net worth in the Forbes Asia list, it has come with a lot of pain for Ambani's group, which lost Rs 3.16 lakh crore of wealth (the highest among the top 25 industrial houses) since January 1 this year.

A study carried out by FE on the market capitalisation of the country's top 25 industrial houses between January 1 and November 14 indicates that their wealth decreased by 64.2% to Rs 6.81 lakh crore on November 14 from Rs 19.02 lakh crore on January 1, on the back of a possible global recession.

During this period, the Sensex fell by 10,915.29 points (-53.8%) to 9,385.42 on November 14 from 20,300.71 on January 1.

DR Dogra, deputy managing director, CARE, said, "The fall in equity prices started by concerns of rising inflation, followed by the subprime crisis, FII outflow, liquidity crunch, weak IIP numbers and slowdown in trade, among others."

He added, "The apparent rosy picture in India on January 1 has suddenly reversed and investor confidence has fallen to a low. The market seems to have lost its bull run and any increase has only been temporary."

Among the industrial houses under study, Jaiprakash Gaur, Essar and Hinduja showed significant decline in terms of market capitalisation since January.

The M-Cap of Jaiprakash Gaur Group, which saw the highest fall, went down by 82.62% from Rs 51,436 crore on January 1 to Rs 8,937 crore on November 14.

Among the Jaiprakash Gaur Group companies, significant decrease in M-Cap was seen in the case of Jaiprakash Associates (-82.7%).

Similarly, the total M-Cap figure Essar Group companies decreased by 77.8% to Rs 10,768 crore on November 14 from Rs 48,448 crore on January 1. Among the companies, highest fall in M-Cap was seen in the case of Essar Shipping (-79.2%).

The total market capitalisation of the Hinduja Group companies decreased by 73.9% to Rs 4,494 crore on November 14 from the level of Rs 17,256 crore in January. Among the Hinduja Group companies, significant decrease in M-Cap was seen in case of Ashok Leyland (-70.7%).

Among other groups studied, more than 65% fall in M-Cap was witnessed in the case of Anil Ambani, Aditya Birla Management Corporation, Sterlite, Mahindra, Brij Mohan Thapar, Om Prakash Jindal, K K Birla, Kalyani and Godrej.

Only one house, Hero-M B Lall showed an increase (2.2%) in M-Cap on November 14 from January 1.