| Price decline causes wealth erosion.
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| The country’s sugar barons like the Bajajs of Bajaj Hindusthan, the Saraogis of Balrampur Chini Mills and the Goels of Dhampur Sugar have seen their wealth dwindle by over 40 per cent, or close to Rs 1,600 crore, in the last three months.
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| These businessmen were worth Rs 2,153.64 crore on February 2, 2007, down 42.55 per cent from Rs 3,748.95 crore on November 1, 2006.
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A sharp decline in sugar prices in India and abroad has caused the share prices of companies controlled by them to drop by up to 50 per cent since November.
BITTER DAYS
(Loss in market capitalisation of major sugar producers) |
| Company |
M cap
on Nov 1 |
M cap
on Feb 2 |
Loss in
M cap |
Promoters’
share (%) |
Promoters’
loss (-) |
| Bajaj Hindusthan |
4,552 |
2,285 |
2,267 |
44.44 |
1007.54 |
| Balrampur Chini |
2,592 |
1,674 |
918 |
31.82 |
292.10 |
| Triveni |
1,755 |
1,213 |
542.36 |
25.00 |
196.47 |
| Dhampur |
572 |
355 |
217 |
35.72 |
77.51 |
| Simbhaoli |
159 |
102 |
57 |
38.17 |
21.75 |
| Total |
9,630 |
5,629 |
4,001 |
— |
1595.37 |
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| Bajaj Hindusthan has fallen 49 per cent from Rs 321.89 on November 1 to Rs 161.60 on February 2, while Balrampur is down 35.42 per cent from Rs 104.45 to Rs 67.45.
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| This has led to an erosion of Rs 4,001 crore in the market capitalisation of these companies (see chart.)
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| What is worse, sugar stocks could tumble further. Several investment analysts have advised “sell” on sugar.
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| Vikram Suryavanshi of Karvy Stockbroking reckons that share prices could fall by another 20 per cent. |
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