THE YEAR 2019 saw the fall of some mighty companies. While some were buried under debt, some faced governance issues, and others became victims of the liquidity crisis. But the net result was the same – deep erosion in market capitalisation.
According to BT research covering the top 500 listed companies, 22 saw a fall of more than 45 per cent in average market cap (October 2018-September 2019 period) over the previous year.
These companies cut across sectors and include Vakrangee, PC Jeweller, Arvind, Rain Industries and Indiabulls Real Estate, among others.
“It is a very wide set of industries and companies. The stress has aggravated, especially for entities whose balance sheets have been leveraged a lot and where operating metrics had deteriorated. In terms of stock price behaviour, mid- and small-caps have been battered. As a result, there has been a significant decline in investor interest,” says Dhananjay Sinha, Head of Strategy and Chief Economist, IDFC Securities.
Some companies have also seen issues around reporting of numbers, whose credibility has been questioned, adds Sinha.
The biggest decline in average market cap was witnessed by technology firm Vakrangee, which runs one of India’s largest networks of last-mile retail outlets. The scrip first came under pressure in early 2018 after Price Waterhouse quit its audit mandate and raised concerns about the company’s books of accounts. The company also came under the scanner of the Securities Exchange Board of India (Sebi) for alleged stock manipulation issues but was given a clean chit in November 2018 by Sebi as well as the Economic Offences Wing. In the meanwhile, its stock took a beating. From ₹420 on January 1, 2018, it continued to fall and closed at ₹36.55 on November 1, 2019.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Pension Scheme - Safety Net
The move to introduce the UPS has evoked mixed reactions. Analysts believe its funding will have limited impact on the fiscal math
The Reit Choice?
Real Estate Investment Trusts (Reits) Are Gaining Traction As Interest Rates Stabilise. But Returns Could Be Affected By Adverse Economic Conditions And Market Volatility
CORPORATE - Calling to Account
The sudden exit of Byju's auditor BDO marks the latest in a long series of setbacks for the edtech firm
EMPLOYMENT: Skills Push
The skill development ministry plans to partner with the UGC to improve the employability of undergraduates
Building on a Vision
L&T'S CHAIRMAN EMERITUS A. M. NAIK HAS BUILT A MAMMOTH ENTERPRISE THAT IS BUILDING A NEW INDIA, FROM ITS METRO RAIL SYSTEMS TO THE RAM TEMPLE
"KYS more important than KYC"
Vijay Kedia is a renowned equity investor; the value of his listed portfolio stands at around ₹1,750 crore
ROXX STAR
THE THAR ROXX COMBINES LUXURY WITH PERFORMANCE TO MAKE A STRONG STATEMENT IN THE MID-SIZE SUV SEGMENT
HIT THE GROUND RUNNING
Smartwatches have become indispensable tools for runners, offering real-time insights into pace, distance, heart rate, and more. Here are a few you can consider
TURNING THE TABLES
INDIA'S FURNITURE MARKET IS POISED FOR A GLOBAL TAKE-OFF. ALREADY, A HOST OF GLOBAL BRANDS HAVE MADE THE COUNTRY THEIR HOME, BUT INDIAN COMPANIES ARE NOT TOO FAR BEHIND
THE EVOLUTION OF ATHERA
IDENTIFYING OPPORTUNITIES IN ADVANCE HAS STOOD THIS BENGALURU-BASED VC FUND IN GOOD STEAD. NOW, WITH A HEIGHTENED FOCUS ON TECHNOLOGY, IT WANTS TO SUSTAIN THE SUCCESS