With billions of personal dollars eroded, the foul market has gatecrashed into many a billionaire party...
November 11, 2008: [10:25am, IST: As final few pages of this issue of B&E get finalised, the BSE continues to tumble. In the past 90 trading minutes, the Sensex has already lost another conscience-striken 452.92 points!] All listed companies today are suffering from global recessionary fears. And how much loss are we really lamenting here? Well, the Sensex has tanked from where it had reached (on one glorified Tuesday - January 8, 2008), when it gonged the bell of 20,873 points, with the blue-chip giants valued at a gargantuan Rs.75.30 trillion! That indeed was history for the 133-year-old Bombay Stock Exchange.
But many history-defining action sequels followed… week after week after the Sensex breached the 20,000 mark and the overwhelming dependence of Indian stock markets on First-World economies became increasingly visible! The total Mcap lost by the Sensex has touched a heart-rending Rs.68.09 trillion as on November 11, 2008. That marks a shaving off of 90.4% of its total value on January 8! And while it becomes obvious that this typical summer has been a rather cold one for India Inc., there are the Indian billionaires whose herd has actually been the one fighting the snow with their jackets ripped off by the trading jackals!
This billionaire community is also the one which has suffered the maximum individual wealth loss; and not surprisingly the biggest of them includes names from the promoter community as Prof. Garland Durham, Asst. Professor of Finance, University of Kentucky confirms, “If you talk about largest individual shareholders who lose wealth when the market falls, it is usually the promoters; who own the largest blocks of equity…” Heading the list is of course the richest residential Indian – Mukesh Ambani, who is renowned for more than just his $2 billion new home. As per market reports, between January 8, 2008 and October 24, 2008, Mukesh lost a brain-tingling Rs.2,054 billion to see his total worth touch a lowly Rs.684.8 billion. What’s obvious here is the fact that it’s the stock market which deserves blame for Mukesh’s plight. B&E analysis proves that for a 66.9% movement in RIL’s adjusted stock price, Mukesh lost an almost equivalent 66.7% of his personal wealth (due to his stock ownership)! Going by the same statistical logic, the senior Ambani would be worth just Rs.825.95 billion today – a fall of almost 60% from the value he commanded during January 2008!
November 11, 2008: [10:25am, IST: As final few pages of this issue of B&E get finalised, the BSE continues to tumble. In the past 90 trading minutes, the Sensex has already lost another conscience-striken 452.92 points!] All listed companies today are suffering from global recessionary fears. And how much loss are we really lamenting here? Well, the Sensex has tanked from where it had reached (on one glorified Tuesday - January 8, 2008), when it gonged the bell of 20,873 points, with the blue-chip giants valued at a gargantuan Rs.75.30 trillion! That indeed was history for the 133-year-old Bombay Stock Exchange.
But many history-defining action sequels followed… week after week after the Sensex breached the 20,000 mark and the overwhelming dependence of Indian stock markets on First-World economies became increasingly visible! The total Mcap lost by the Sensex has touched a heart-rending Rs.68.09 trillion as on November 11, 2008. That marks a shaving off of 90.4% of its total value on January 8! And while it becomes obvious that this typical summer has been a rather cold one for India Inc., there are the Indian billionaires whose herd has actually been the one fighting the snow with their jackets ripped off by the trading jackals!
This billionaire community is also the one which has suffered the maximum individual wealth loss; and not surprisingly the biggest of them includes names from the promoter community as Prof. Garland Durham, Asst. Professor of Finance, University of Kentucky confirms, “If you talk about largest individual shareholders who lose wealth when the market falls, it is usually the promoters; who own the largest blocks of equity…” Heading the list is of course the richest residential Indian – Mukesh Ambani, who is renowned for more than just his $2 billion new home. As per market reports, between January 8, 2008 and October 24, 2008, Mukesh lost a brain-tingling Rs.2,054 billion to see his total worth touch a lowly Rs.684.8 billion. What’s obvious here is the fact that it’s the stock market which deserves blame for Mukesh’s plight. B&E analysis proves that for a 66.9% movement in RIL’s adjusted stock price, Mukesh lost an almost equivalent 66.7% of his personal wealth (due to his stock ownership)! Going by the same statistical logic, the senior Ambani would be worth just Rs.825.95 billion today – a fall of almost 60% from the value he commanded during January 2008!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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