Stock market bears drag down India's billionaire club to 3-year low of 71

Number is down to 71 from all-time high of 90 at the end of March 2018

Stock market bears are pushing many of India’s top promoters out of the billionaires’ club.  

After growing steadily for five years, the list of billionaire promoters is shrinking, with the stock prices of a number of top listed companies declining sharply over the past 16 months. The count of such promoters is now down to 71 from an all-time high of 90 at the end of March 2018, and 81 in March this year.

The 71 billionaire promoters are worth $326 billion now, as against $353 billion at the end of March last year. Smaller promoters accounted for much of the decline, while top businessmen saw an increase in their net worth during the period.

In all, 24 promoters (excluding new entrants) have exited the billionaires’ club in the past 16 months, suffering a combined loss of $14.7 billion (around Rs 1 trillion) in their net worth.

Some of the prominent exits are Anil Ambani (down 92 per cent from March 2018), Rana Kapoor of YES Bank (down 70 per cent), Dilip Suryavanshi of Dilip Buildcon (down 58 per cent), Motilal Oswal and Raamdeo Agrawal of Motilal Oswal Financial Services (down 42.5 per cent), and Achal Bakeri of Symphony (down 32.4 per cent).
 

The promoter stake in the Anil Ambani group is now worth Rs 1,981 crore, as against Rs 25,271 crore at March 2018-end. Similarly, the promoter stake in the Rana Kapoor-promoted YES Bank is worth Rs 4,185 crore, as against Rs 14,000 crore at the end of March 2018.  However, it’s not all gloom and doom for India’s super rich as many of them have seen a handsome rise in their net worth in recent months. 

For example, Mukesh Ambani of Reliance Industries, who tops the chart, saw a 45.1 per cent rise in the value of his stake since March last year. The Gautam Adani family’s stake in various group companies is up 42 per cent in value since March 2018, while Azim Premji’s stake in Wipro is up 25 per cent in value.

In all, the country’s top 10 promoters are now worth around $158 billion, up from $132 billion at the end of March 2018.

Sectorally, the biggest fall has been witnessed in sectors such as non-banking finance companies (NBFCs), automotive, real estate, pharmaceuticals, and graphite electrodes. In comparison, promoters in sectors such as IT services, FMCG and cement have done well.

The analysis is based on the promoters’ stake and market capitalisation of a common sample of 822 companies that are either part of BSE500, BSE MidCap or BSE SmallCap index. The sample excludes government-owned companies, listed subsidiaries of global multinationals, institution-owned companies, and their subsidiaries such as L&T, HDFC, and ICICI Bank. The sample has also been adjusted for separately listed subsidiaries of holding companies such as Reliance Industries, Tata Steel, Grasim Industries, Bombay Burmah, Reliance Capital, Bajaj Finserv, Godrej Industries, and Mahindra & Mahindra, among others.

The value of promoters’ stake is net of the cross-holding of various listed group companies in each other. The latest numbers are based on market capitalisation as on July 22, 2019, and shareholding pattern at the end of either June 2019 or March 2019. The rupee-dollar exchange rate is average for the respective financial year to smoothen out its volatility.