Stocks of banking licence aspirants lose sheen

BS Bank Aspirex, formed by Business Standard, has underperformed markets by falling 16% in one month

BS Bank Aspirex, a new index by Business Standard that covers 16 companies that have applied for a banking licence, has underperformed the market by falling 16 per cent in the past month compared with one per cent decline in the S&P BSE Sensex.

The BSE banking share index, Bankex, on the other hand, dipped 14.5 per cent since July 1, the last day of applying for a banking licence with the Reserve Bank of India (RBI).

Aspirex has fallen 29 per cent in the current calendar year compared with the 20 per cent drop in Bankex and a marginal 0.42 per cent decline in the S&P BSE Sensex.

Aspirex includes IDFC, L&T Finance Holdings, LIC Housing Finance, Aditya Birla Nuvo, Reliance Capital, Muthoot Finance, Bajaj Finance, India Infoline, Religare Enterprises, Edelweiss Financial Services, Magma Fincorp, JM Financial, IFCI, Videocon Industries, Tourism Finance Corporation of India (TFCI) and SREI Infra Finance.

Methodology
The index is calculated on a full market capitalisation methodology, the base period for which is December 31, 2012. The base value of the index has been set at 1,000, and base capital at Rs 121,586 crore.

With a weightage of 19 per cent, IDFC is the most influential stock in this pack, followed by Aditya Birla Nuvo (15 per cent), L&T Finance Holdings (12 per cent), Reliance Capital (9.8 per cent) and LIC Housing Finance (9.7 per cent). Aspirex weightage is measured by the total market value of a company.

LIC Housing Finance, the largest loser in the index, tanked 35 per cent in the past month to Rs 165.95 on July 31 from Rs 254.90 at the beginning of the month. JM Financial, Muthoot Finance, L&T Finance Holdings, Bajaj Finance, Videocon Industries, IDFC and IFCI have declined 16-31 per cent on the BSE.

India Infoline, Tourism Finance Corporation and Srei Infrastructure Finance, however, performed slightly better, falling less than 16 per cent, while Magma Fincorp, Religare Enterprises, Reliance Capital and Edelweiss Financial Services have seen value erosion in the range of two-10 per cent during the month.

Meanwhile, Aditya Birla Nuvo has solely outperformed by surging 6.4 per cent to Rs 1,165. The company’s weightage in the index has increased to 15.9 per cent from 12.6 per cent during the period.

	TOP LOSERS
	01-Jul-13	31-Jul-13	% fall
LIC Housing Fin	254.90	165.95	-34.9
JM Financial	28.15	19.45	-30.9
Muthoot Finance	106.65	76.65	-28.1
L&T Fin.Holdings	80.15	61.35	-23.5
Bajaj Finance	1442.00	1145.10	-20.6
Price on BSE in Rs