Virus leaves Mukesh Ambani poorer by $5 bn

Global risk aversion sparked off by coronavirus has wiped out major wealth for top Indian billionaires.

Reliance Industries’ Chairman Mukesh Ambani, the richest man in India and whole of Asia, has lost some $5 billion of his wealth year to date in notional terms.

Aditya Birla Group Chairman Kumar Mangalam Birla is poorer by $884 million, as per Bloomberg Billionaire Index. IT tycoon Ajim Premji’s wealth is down by $869 million and industrialist Gautam Adani’s by $496 million in just two months.

Uday Kotak and Sun Pharma’s Dilip Sanghvi also are among the biggest losers, as stocks of their companies have received a huge battering, destroying major wealth.

Most of this wealth erosion happened over the last 15 days, when domestic equity indices have come tumbling down. BSE Sensex has crashed nearly 3,000 points in 11 sessions since February 12, when Dalal Street first caught the chill from the virus. This stock rout has wiped off Rs 11.52 lakh crore of equity investors’ wealth on Dalal Street.

In tandem, broader market indices have also seen severe correction during this period, wiping most of their gains logged so far in 2020.

Among the large Indian business conglomerates, Reliance Group has been the most affected in terms of loss of market capitalisation of their listed stocks. The market-cap of all RIL firms have come down by Rs 53,706.40 crore between February 13 and February 27. In Friday's market crash, as Sensex plunged 1,100 points, RIL shares fell 2.8 per cent.

RIL group firm Reliance Industrial Infrastructure has taken the biggest hit, down over 13 per cent since February 12. Reliance Industries and Network18 have slumped 6 per cent, TV18 Broadcast 7 per cent and Den Networks 2 per cent. However, shares of Hathway Bhawani Cabletel & Datacom, which RIL acquired recently, has soared over 16 per cent.


Despite this about turn in Reliance Industries’ fortunes, analysts remained positive on the stock. As many as 26 analysts had either a ‘buy’ or ‘outperform’ rating on the stock. Only one analyst had a ‘sell’ call, as per Reuters data.

Tata Group companies have lost Rs 41,930 crore. Shares of as many as 21 of group firms have slipped into the red during this period. Automotive Stampings & Assemblies and Tata Teleservices have fallen 25 per cent each. Tata Motors and Tata Elxsi dropped 15 and 12 per cent, respectively.

Tata Motors-owned Jaguar Land Rover warned that its production schedules in the UK as well as India are under strain due to its supply chains in coronavirus-hit China. In fact, last week the company flew Chinese parts in suitcases to Britain to maintain production.

On Friday, Tata Motors fell 9 per cent and Tata Steel 6.7 per cent.

Emkay Research has ‘buy’ rating on Tata Motors with a price target of Rs 238, which means a 64 per cent potential upside from last close. Prabhudas Lilladher has a ‘hold’ recommendation with a price target of Rs 185.

Among other major business houses, Adani group has lost over Rs 27,100 crore in market capitalisation of its stocks, Aditya Birla Rs 17,500 crore and Wadia Group which controls firms like Britannia has lost Rs 3,300 crore.

Analysts have mixed outlook for the market as they fear the risk of coronavirus outbreak becoming pandemic.

Marc Faber, author of the Gloom, Boom & Doom Report, on Friday said markets have significant downside risks, given that the coronavirus is destroying several industries, and also because bluechips are trading at rich valuations.


However, seasoned Dalal Street investors like Hiren Ved of Alchemy Capital Management, feels this meltdown could be a good time to accumulate good stocks.