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Meltdown: Billion-dollar club halves!

By Deepak Korgaonkar in Mumbai
October 03, 2008 10:28 IST
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The elite club, comprising members with $1-billion market capitalisation (m-cap), has shrunk by more than half to 122 as on September 30 from a high of 252 on January 8 this year. A steep fall in the market value from January 8 and a depreciation of the rupee against the dollar have brought down the number of dollar billionaires.

The aggregate market value of 252 stocks, with an m-cap of a billion dollars on January 8, has declined by 54 per cent, while the market value of 122 companies, currently in the billionaires' list, has declined by 42 per cent between January 8 and September 30 this year.

Jai Corp, Indiabulls Real Estate, Indiabulls Financial Services, Lanco Infratech, Godrej Industries, Pantaloon Retail, Edelweiss Capital, GVK Power and HMT were the proud members of the billion-dollar, market-cap club at the start of the current calendar year with market value of over $3 billion each on January 8. After nine months, these companies are out of the club, with the m-cap of their stocks listed on BSE declining by over 70 per cent each.

Banking stocks were among the major losers as the number of banks in the club dropped from 28 to 15. Yes Bank, Oriental Bank of Commerce, Corporation Bank, UCO Bank and Syndicate Bank are now out of the club. Information technology and pharmaceuticals (nine each), electronics and refineries (seven each), construction, power and telecommunication (six each) and steel and automobiles (four each) were among the other sectors that lost the most in the billionaires' list.

The number of stocks with an m-cap over $10 billion declined from 41 to 22 during the same period. Sterlite Industries, Reliance Capital, Suzlon Energy, Unitech, Reliance Infrastructure and Jaiprakash Associates saw value erosion of more than $10 billion each in the last nine months. Reliance Industries, with m-cap erosion of $52.65 billion, topped the list of market value losers.

Real estate major DLF, which had an m-cap of almost $50 billion on January 8, saw a decline of $37.15 billion to $12.8 billion. The market value of NMDC, MMTC, Reliance Communications, NTPC, ICICI Bank and ONGC dropped by more than $25 billion each.

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Deepak Korgaonkar in Mumbai
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