Street signs: India out of $100-bn club, Raymond stock rise, and more

Pledged shares compound woes 

Shares of several companies have witnessed a huge sell-off in recent weeks. The situation has gotten tricky — both for lenders as well as borrowers — in case of companies where a large number of shares are pledged. 

Non-banking firms, which typically lend against shares, themselves are facing a liquidity crunch. On the other hand, a lot of highly-indebted companies with high share pledging have seen their stock prices nosedive. “The situation has become very delicate. Things could implode if liquidity and stock market conditions don’t improve,” said an analyst.

— Samie Modak

Dividend bounty in Raymond?

Textile major Raymond, which is expected to sell a land parcel of around 20 acres in Thane, is seeing interest from some investors. The land parcel is expected to fetch the company Rs 6-7 billion. The company, which owns around 125 acres in the area, has been planning to sell the land in parts or jointly develop it in the past few years. There is a strong buzz in the market that the company may pay a one-time dividend to investors if the sale deal goes through. The company’s share price closed at Rs 638 on Friday. 

— Joydeep Ghosh

India out of $100-bn club  

India no longer has any company in the $100-billion market capitalisation club. The market value of both Reliance Industries (RIL) and Tata Consultancy Services (TCS) has slipped below the $100-billion mark following a sharp slide in their stock price. RIL is currently valued at $95 billion (Rs 6.98 trillion), while TCS’ market cap is $98 billion (Rs 7.2 trillion). The weakness in stock markets and falling rupee are proving to be a double whammy for dollar valuations. The rupee is down 13 per cent year-to-date. India’s market cap in dollar terms is near its 19-month low at $1.86 trillion, even as benchmark Sensex is up two per cent year to date in rupee terms. “It is not easy to sustain stock prices in the current market, forget negating the loss in the rupee,” said a broker.

— Samie Modak