A meltdown in the stock market triggered by the coronavirus (Covid-19) pandemic has seen the frontline indices – the S&P BSE Sensex and the Nifty 50 – tank 32 per cent thus far in the calendar year 2020 (CY20). The fall has wiped-off nearly Rs 46 trillion in market capitalisation of the BSE-listed companies.
Amidst the massacre, the networth of high individual investors (HNIs) such as Rakesh Jhunjhunwala & Family, Ashish Dhawan, Anil Kumar Goel & Family, Ashish Ramchandra Kacholia and Dolly Khanna have taken a massive hit.
The big bull of Indian equity markets, Rakesh Jhunjhunwala & family, has lost Rs 3,554 crore thus far in CY20, with value their investments slipping below Rs 10,000 crore mark. Based on Thursday’s closing price, Rakesh Jhunjhunwala & family’s total investments in listed companies stood at Rs 8,925 crore, down 28 per cent as compared to Rs 12,480 crore at the end of December 2019.
According to data from the latest shareholding pattern where they held an over one percentage point stake reveals that these investors took a painful hit due to sharp correction in shares of mid-and small-cap companies. While the mid-cap index has slipped 27 per cent, the small-cap index has lost nearly 29 per cent during this period.
In Titan that has slipped 24 per cent to its 52-week low of Rs 900 per share, for instance, where Rakesh Jhunjhunwala along with his wife Rekha Jhunjhunwala, holds 6.69 per cent stake, the value erosion thus far in CY20 has been Rs 1,710 crore. Jhunjhunwala’s investment in Titan based on December 2019 quarter’s shareholding pattern now stands at Rs 5,344 crore.
NCC, Delta Corp, Karur Vysya Bank, Aptech and Jubilant Life Sciences are among those stocks from Jhunjhunwala’s portfolio that took a severe hit, falling more than 50 per cent during the period. However, Lupin, Escorts and Rallis India have outperformed the market by declining less than 20 per cent.
In percentage terms, Anil Kumar Goel & Seema Goel who hold stocks of sugar companies such as Dhampur Sugar, Triveni Engineering and Industries, Dwarikesh Sugar and Uttam Sugars in their portfolio, the average value erosion has been 49 per cent to Rs 453 crore. On the other hand, other investors such as Ashish Dhawan, Ashish Ramchandra Kacholia and Dolly Khanna have seen their portfolio value dip between 36 per cent and 44 per cent thus far in CY20.
While the jury is still out how long the health scare will continue to impact the markets, analysts at ICICI Securities suggest the real impact to come from the demand side due to the cascading impact of the slowdown. This can eventually lead to suppressed prices and, thereby, financial growth of most companies.
“Majority of the negative outcomes from Covid-19 in at least the next two quarters are already discounted across global indices. However, either any delay beyond that or a substantial increase in infection can result in more negative outcomes. Hence, the probability of further downsides in equity indices cannot be ruled out,” wrote Chirag Shah and Dhavan Shah of ICICI Securities in a note.
Meanwhile, the valuations of the mid-and small-cap segments has dipped below the long-term averages.
“Post market correction, current price-earnings (PE) of NSE Mid-cap Index is -33 per cent/-22 per cent versus its 5/10-yr average. For Nifty50, the same is -21 per cent/-15 per cent. On the other hand, the current PE for our Midcap coverage is -27 per cent/-1 per cent versus its 5/10-yr average,” says Sonali Salgaonkar, an analyst with Jefferies tracking these market segments.
Amidst the massacre, the networth of high individual investors (HNIs) such as Rakesh Jhunjhunwala & Family, Ashish Dhawan, Anil Kumar Goel & Family, Ashish Ramchandra Kacholia and Dolly Khanna have taken a massive hit.
The big bull of Indian equity markets, Rakesh Jhunjhunwala & family, has lost Rs 3,554 crore thus far in CY20, with value their investments slipping below Rs 10,000 crore mark. Based on Thursday’s closing price, Rakesh Jhunjhunwala & family’s total investments in listed companies stood at Rs 8,925 crore, down 28 per cent as compared to Rs 12,480 crore at the end of December 2019.
According to data from the latest shareholding pattern where they held an over one percentage point stake reveals that these investors took a painful hit due to sharp correction in shares of mid-and small-cap companies. While the mid-cap index has slipped 27 per cent, the small-cap index has lost nearly 29 per cent during this period.
In Titan that has slipped 24 per cent to its 52-week low of Rs 900 per share, for instance, where Rakesh Jhunjhunwala along with his wife Rekha Jhunjhunwala, holds 6.69 per cent stake, the value erosion thus far in CY20 has been Rs 1,710 crore. Jhunjhunwala’s investment in Titan based on December 2019 quarter’s shareholding pattern now stands at Rs 5,344 crore.
NCC, Delta Corp, Karur Vysya Bank, Aptech and Jubilant Life Sciences are among those stocks from Jhunjhunwala’s portfolio that took a severe hit, falling more than 50 per cent during the period. However, Lupin, Escorts and Rallis India have outperformed the market by declining less than 20 per cent.
In percentage terms, Anil Kumar Goel & Seema Goel who hold stocks of sugar companies such as Dhampur Sugar, Triveni Engineering and Industries, Dwarikesh Sugar and Uttam Sugars in their portfolio, the average value erosion has been 49 per cent to Rs 453 crore. On the other hand, other investors such as Ashish Dhawan, Ashish Ramchandra Kacholia and Dolly Khanna have seen their portfolio value dip between 36 per cent and 44 per cent thus far in CY20.
While the jury is still out how long the health scare will continue to impact the markets, analysts at ICICI Securities suggest the real impact to come from the demand side due to the cascading impact of the slowdown. This can eventually lead to suppressed prices and, thereby, financial growth of most companies.
“Majority of the negative outcomes from Covid-19 in at least the next two quarters are already discounted across global indices. However, either any delay beyond that or a substantial increase in infection can result in more negative outcomes. Hence, the probability of further downsides in equity indices cannot be ruled out,” wrote Chirag Shah and Dhavan Shah of ICICI Securities in a note.
Meanwhile, the valuations of the mid-and small-cap segments has dipped below the long-term averages.
“Post market correction, current price-earnings (PE) of NSE Mid-cap Index is -33 per cent/-22 per cent versus its 5/10-yr average. For Nifty50, the same is -21 per cent/-15 per cent. On the other hand, the current PE for our Midcap coverage is -27 per cent/-1 per cent versus its 5/10-yr average,” says Sonali Salgaonkar, an analyst with Jefferies tracking these market segments.
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