Sensex pulls down market capitalisation of 8 Gujarat companies

After having touched the 21,000 mark on Samvat 2067 on November 5, 2010, Sensex started falling. Between November 5, 2010 and May 23, 2011, Sensex has fallen 14% but eight large cap companies of Gujarat have seen their market capitalisation fall in the range of 20% to 50%. However, four such companies have seen their market capitalisation rise.

In the past six months, Sensex has fallen below 18,000 level for the fourth time. On Monday, the index closed at 17,993.33, shedding 333 points. And Nifty closed at 5,386.55 after a plunge of 100 points.

Interestingly, the biggest market capital loser and the second largest gainer are from the pharmaceutical industry. The market capital of Dishman, promoted by JR Vyas, has fallen by 50% in last six months while Cadila Healthcare, promoted by Pankaj Patel, has seen a rise of 21% in its market capital. 

Despite having raised money through QIP (qualified institutional placement), Kiri Industries has lost 49% of market cap since November 2010. Following it closely is Torrent Cables with a loss of 38% in market cap.

The companies of the wealthiest Amdavadi, Gautam Adani, have too witnessed a fall in market capitalisation. Adani Power, Adani Enterprise and Mundra Port & Special Economic Zone (MPSEZ) have seen a fall of 21%, 20% and 8% respectively in market capital.

At the same time, Torrent Power, promoted by Samir Mehta & Sudhir Mehta, has also lost its market cap by 20%. "The power sector in India is currently facing a lot of regulatory issues, which is hampering the timely execution of projects, thereby impacting their performance," said KK Gondaliya, manager of Marwadi Stock Brokers Ltd.

Experts feel that pharma is a defensive sector which has helped break the market trend. Also, there will be opportunities for pharma sector in the days to come. For example, Torrent Pharma recorded a 10% increase in market cap. "Sectors like pharma and FMCG are those which provide capital protection," said Mahendra Prajapati, associate vice president, India Infoline.

But Arvind Ltd, promoted by Sanjay Lalbhai, has seen a turnaround in its market capital, which is against the trend of companies on stock bourses. It market capitalisation increased by 34% in just last six months.

Rajesh Punjabi, general manager of Shah Investors, said: "Arvind Ltd has seen an appreciation due to its business, and Karsanbhai Patel promoted-Nirma Ltd, despite the delisting offer, has not been affected due to less liquidity."