Billion dollar-club shrinks; 53 BSE firms lose over $1 billion in m-cap since August 2015 highs

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NEW DELHI: Concerns pertaining to anaemic global growth, a currency war led by the Chinese yuan, Fed rate hike, lack of domestic earnings momentum and a delay in key reforms have been shrinking the club of billion dollar market-cap companies in India.

At the rupee’s last week’s closing of 67.63 against the US dollar, the number of BSE-listed stocks with a market capitalisation of $1 billion or above stood at 200, data from corporate database AceEquity showed.

At this exchange rate, as many as 218 companies out of the 2,539 in the BSE listed universe were part of the billion-dollar m-cap club as of August 6, 2015, the day the combined m-cap of BSE-listed stocks hit a high of Rs 1,06,42,739 crore.

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As many as 21 companies, including SKS Microfinance, Just Dial, Indian Bank, Jindal Steel & Power, SPARC, Bajaj Corp and Hexaware Technologies slipped out of the billion dollar club, data showed. (See table)

“Nothing has changed. Just because the market has corrected 15-20 per cent, we cannot say the India bull story is over,” said Madhusudan Kela, Chief Investment Strategist, Reliance Capital, in an interview to ET Now.

“I can thump the table and say that the long term India story is intact,” Kela said.

Four companies — Kajaria Ceramics, TV18 Broadcast, Jet Airways (India) and Symphony — on the other hand managed to enter the billion dollar club. (See table)

Out of 2,539, as many as 1,507 stocks have seen a fall in m-cap since August 6, 2015. A total of 53 stocks have seen an erosion in m-cap by over $1 billion since then.

The biggest fall was seen in the shares of Coal India, which has lost Rs 82,839.12 crore, or roughly $12.24 billion, in m-cap. State-run lender State Bank of India (SBI) has lost Rs 75,028 crore, or $11.09 billion, in m-cap.

Others major losers included Larsen & Toubro (down by Rs 63,694 crore), TCS (Rs 55,528 crore), Bharti Airtel (Rs 46,390 crore), ONGC (Rs 46,114 crore) and ICICI Bank (Rs 45,425 crore) lost up to $9.41 billion in m-cap since BSE m-cap’s August highs.

Meanwhile, only three companies managed to add over $1 billion in their market capitalisations during this period. They include Infosys (up by Rs 10,669 crore), Essar Oil (up by Rs 8555 crore) and Reliance Industries (Rs 8,075 crore)

“In psychology, people talk about OCD: obsessive compulsive disorder. Markets currently have another kind of OCD — which is oil, China and commodities. No one knows where the bottom for crude oil is, but I heard someone saying that at these prices a lot of players do not find it viable to extract oil. So somewhere production will taper off and balancing should happen. So I do not see that much of a worry,” Rajeev Thakkar, CIO, Parag Parikh Financial, said in an interview to ET Now.

“If you are ONGC or Oil India, obviously there is a problem. Your profits will be under pressure. Things will go off. Primary commodity players will have a lot of earning downgrades. The problem is what happens to these countries which have invested in sovereign wealth funds. How much money will go out? It is more about supply of securities in the market. It does not affect the underlying business per se,” Thakkar said.

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