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The country's sugar barons like the Bajajs of Bajaj Hindusthan, the Saraogis of Balrampur Chini Mills and the Goels of Dhampur Sugar have seen their wealth dwindle by over 40 per cent, or close to Rs 1,600 crore (Rs 16 billion), in the last three months.
These businessmen were worth Rs 2,153.64 crore (Rs 21.536 billion) on February 2, 2007, down 42.55 per cent from Rs 3,748.95 crore (Rs 37.489 billion) on November 1, 2006.
A sharp decline in sugar prices in India and abroad has caused the share prices of companies controlled by them to drop by up to 50 per cent since November.
Bajaj Hindusthan has fallen 49 per cent from Rs 321.89 on November 1 to Rs 161.60 on February 2, while Balrampur is down 35.42 per cent from Rs 104.45 to Rs 67.45.
|
BITTER DAYS (Loss in market cap of major sugar producers in Rs crore) | |||||
|
Company |
M-cap on Nov 1 |
M-cap on Feb 2 |
Loss in M-cap |
Promoters' share (%) |
Promoters' loss |
|
Bajaj Hindusthan |
4,552 |
2,285 |
2,267 |
44.44 |
1,007.54 |
|
Balrampur Chini |
2,592 |
1,674 |
918 |
31.82 |
292.10 |
|
Triveni |
1,755 |
1,213 |
542.36 |
25.00 |
196.47 |
|
Dhampur |
572 |
355 |
217 |
35.72 |
77.51 |
|
Simbhaoli |
159 |
102 |
57 |
38.17 |
21.75 |
|
Total |
9,630 |
5,629 |
4,001 |
-- |
1,595.37 |
This has led to an erosion of Rs 4,001 crore (Rs 40.01 billion) in the market capitalisation of these companies.
What is worse, sugar stocks could tumble further. Several investment analysts have advised "sell" on sugar.
Vikram Suryavanshi of Karvy Stockbroking reckons that share prices could fall by another 20 per cent.
