Over Half Of B-Group Cash Shares Ruling Below Par

According to a study carried out by, prices of 3,214 scrips out of 5,308 listed on the B group are between nil and Rs 10. Of the 3,214 ruling below par, well over 50 per cent, 2,016 scrips, or 37.8 per cent of the total number of stocks are ruling below Rs 5 shareholders' capital has eroded more than half.

The study was carried out on the basis of the closing prices on September 5. Another 1,192 scrips are hovering between Rs 10 and Rs 30, offering limited capital gain to the shareholder who entered at Rs 10 and very little to investors who are looking for strong mid-priced companies.

 

It appears a mere 902 scrips have managed to squeeze above Rs 30, and only 12 of them have risen to above Rs 100. Clearly, for investors looking for high and long term capital gain, the B group is no place to go.

The Indian market, which therefore boasts of having close to the highest market capitalisation among all emerging markets, is actually a market without any depth at all a majority of the cash group shares do not provide investors any option at all, and actually result in erosion of their investible capital.

Marketmen said it is not surprising that investments have been concentrated on the 30 shares of the Sensex. Trading is almost entirely concentrated on these highly traded bluechips, there is either no trading or no capital gain to be had from the rest of the market.

Not that all these companies are making losses. Ajanta Soya, Ambuja Electric, Anant Raj Ind, Arihant Inds, Armour Poly, Ashok Fashion, Asian Bearing, BWL, Chemquip, DR Industries, Deccan Granites, Kusum Ingots, Lan Eseda, Manav Yarn Mukand Syntex, Ruchi Strips were quoting below their face value during in first week Sept 96 on BSE despite having made profits.

Among the `B' Group there are 12 companies like Alembic Chemical, Andhra Pradesh Paper, Bayer India, Bharat Bijlee, Colour Chem, G G Dandekar, Indian Link Chain, Ravalgaon Sugar, United Carbon, Vishnu Sugar, Widia India and Zandu Pharma which were quoted more than Rs 1,000. But their face value is Rs 100. Ravalgaon sugar's face value is Rs 50.