Realty leads Monday mayhem

FIIs lose Rs 64,000 crore in infra, real estate stocks this year

The Bombay Stock Exchange’s (BSE’s) realty index was the biggest loser today as it fell by 7.65 per cent to close at 4,334.52. Orbit Corporation, HDIL, Ansal Infrastructure and Peninsula Land fell more than 10 per cent each, while DLF, Unitech, Akruti City, Sobha Developers and Indiabulls Real Estate declined in the range of 5 to 10 per cent. Among these losers, HDIL, Indiabulls Real Estate and Unitech closed at their 52-week lows.

Today’s fall was no exception. For example, the BSE realty index has been among the worst performers in the current year so far — down 66 per cent.

No wonder, investments of foreign institutional investors (FIIs) in realty and infrastructure companies have eroded sharply by Rs 63,875 crore during this period. FIIs, which held stocks amounting to Rs 1,17,421 crore in 105 infrastructure and realty companies as in December 2007, are currently valued at Rs 53,546 crore.

These investors saw value erosion of Rs 40,710 crore in construction stocks, Rs 14,003 crore in power and Rs 9,162 crore in engineering shares to date this year. Construction and real estate companies, which burnt their fingers the most due to the US sub-prime crisis, are among the major losers.

FIIs lost over Rs 5,000 crore each in DLF, Indiabulls Real Estate and Jaiprakash Associates, while their investments in Unitech, IVRCL Infrastructure, Nagarjuna Constructions, Punj Lloyd, Anant Raj Industries and HDIL have eroded in the range of Rs 1,000 to Rs 2,000 crore from the December 2007 level. HSBC Global Investments is the biggest loser in the current market carnage.

The company’s combined market value in these stocks has declined by Rs 2,644 crore from Rs 4,201 crore at the end of December 2007 to Rs 1,557 crore today.

Its market value in Indiabulls Real Estate has declined by Rs 1,032 crore and in IVRCL Infrastructure by Rs 242 crore. Morgan Stanley witnessed Rs 3,160 crore value erosion in their infrastructure portfolio.

The total market value of Merrill Lynch Capital Markets in these stocks has declined by Rs 1,600 crore and of Goldman Sachs Investments by Rs 1,110 crore from their December 2007 levels.