Floats Of 96 Underperform Sensex By 16.84 Per Cent

A comparative study of the local prices of the companies that issued GDRs in 1996 reveals that they have underperformed the BSE Sensex by 16.84 per cent in one year after the issue. Nine companies issued GDRs in 1996 which included heavyweights like ICICI, BSES, Telco, Larsen & Toubro and SAIL.

Average prices for the scrips were taken over a period of four quarters after the GDR issue, with a base of average prices of one year prior to the issue.

Of the nine issues, only BSES outperformed the BSE Sensex in all the quarters gaining 15.93 per cent (first quarter), 29.6 per cent (second quarter), 37.12 (third quarter) and 56.91(fourth quarter). After underperforming by 0.84, SBI gained by 11.84 per cent in the second quarter, 12.98 per cent and 3.87 per cent subsequently. Telco declined after gaining in the first quarter. It underperformed the Sensex by 7.83 per cent in the second quarter, 16.71 in the third and 18.48 per cent in the fourth quarter respectively.

 

The remaining six companies, Crompton Greaves, ICICI, Indo Rama, SAIL and Kesoram Industries have consistently underperformed the BSE Sensex declining in all four quarters.

The repercussions of the rumblings in the local markets were felt in the GDR markets with the latter witnessing sharp fluctuations during the last fortnight. The Skindia GDR Index oscillated around 12.30 per cent, while back home the BSE Sensex moved in a range of 7.22 per cent. The Skindia GDR Index, which was hovering around its 52-week low, recovered lost ground due to a sharp rise in prices of pivotals towards the later half of the week.

The 65 GDRs gained 2.45 per cent on an average while their underlying shares gained 3.45 per cent. GDRs from telecom, fertilisers and pharma sectors were the majo r gainers of the week, gaining 5.73 per cent, five per cent and 4.62 per cent respectively. The only industry to lose was textile, which slipped marginally by 0.89 per cent.

The major GDR gainers of the week were ITC which closed at $19.75 up 19 per cent over the previous close, United Phosphorous which closed at $3 (up 16.67 per cent) and BSES at $15.50 (up 14.81 per cent).

Top losers of the week were Crompton Greaves at $1.50, down 14.29 per cent over the previous close, Ashok Leyland at $2.75(down 12.14 per cent) and India Cements (down 2.25 per cent).

In terms of underlying shares, the NEPC scrip was the major gainer of the week, moving up by 30.91 per cent to close at Rs 3.60. The CESC scrip closed at Rs 29.25, up 17 per cent, while the Ballarpur Industries scrip closed at Rs 26, up 16.85 per cent over the pervious week's close.

Losers included Core Healthcare at Rs 9.50 (down 18 per cent). Indo Rama at Rs 12 (down 11 per cent) and Himachal Futuristics at Rs 16.50, down 10 per cent over the previous week's close.