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Sensex fall takes toll on billionaires’ wealth

Sensex fall takes toll on billionaires’ wealth
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First Published: Sat, Mar 15 2008. 01 04 AM IST

Updated: Sat, Mar 15 2008. 01 04 AM IST
Mumbai: The market meltdown has not made the Indian billionaires paupers but their wealth has been eroded substantially.
India’s top 10 billionaires have seen their wealth eroded by between 22% and 50% in the two months between 10 January 2008, when the Sensex recorded its lifetime high of 21,206.77, and 13 March, when the bellwether index closed at 15,357.35, its lowest in almost seven months.
Ramesh Chandra of Unitech Ltd and Gautam Adani of Ahmedabad-based Adani Group are the worst affected. In dollar terms, Adani’s wealth has been eroded by 50.23% to $6.41 billion during this time. Chandra isn’t better off either, with the market value of his stake in Unitech eroding by 50.05% to $7.94 billion.
The next big loser is another realtor, K.P. Singh of DLF Ltd. His notional wealth has come down by 48.36% to $22.56 billion. Anil Ambani of the Anil Dhirubhai Ambani Group also saw the value of his investment going down by 46.35% to $30.89 billion. In contrast, Mukesh Ambani has been relatively less affected by the 27.5% fall of the Sensex. The senior Ambani’s wealth has shrunk by just 28.02% to $41.13 billion.
Mint calculations ignore cross-holdings such as Anil Ambani’s indirect holding in Reliance Power through his ownership in Reliance Energy.The reason is that Reliance Energy’s valuation already discounts the holding in Reliance Power and if a value is also assigned to the indirect stake held by the promoter, it would result in double counting. Similarly, Reliance Industries Ltd’s holding in Reliance Petroleum Ltd and Reliance Industrial Infrastructure Ltd has been ignored.
So is Grasim Ltd’s 48% holding in Ultratech Cement Ltd and Aditya Birla Nuvo Ltd’s 32% stake in Idea Cellular as these large stakes get reflected in the holding company’s valuation. However, other insignificant cross holdings such as Grasim’s 2.4% stake in Hindalco, which itself has a 2.5% stake in Grasim, haven’t been adjusted to arrive at Kumar Mangalam Birla’s wealth.
Anil Ambani wealth as on 10 January is based on the initial public offer (IPO) valuation of Reliance Power Ltd of Rs450 per share. Although the shares weren’t listed at that time, the IPO price band had already been announced. Reliance Power’s current valuation is after adjusting for the 3:5 bonus issue. Also, Anil Ambani’s stake in the company has been reduced to 40% to reflect the change in shareholding pattern, based on the bonus announcement.
Sunil Mittal’s wealth is based on a 70% stake in Bharti Telecom. The firm holds a 45.3% stake in Bharti Airtel Ltd, but not all of Bharti Telecom’s shares are held by Sunil Mittal and family. Bharti Telecom’s shareholding isn’t public as it’s an unlisted company, but on last count, the group held about 70% in it while the rest was held by Singtel arm, Pastel Ltd, and a few minority shareholders.
The Forbes list of billionaires assigns values for some unlisted firms based on peer group valuation. As a result, the Ruias of the Essar group are listed as the fourth richest with a net worth of $15 billion in the Forbes list, thanks to their large stake in Vodafone Essar Ltd. But Mint calculations are only based on listed companies due to which the Ruias and Adi Godrej fail to make it to the top ten.
Ashwin Ramarathinam contributed to this story
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First Published: Sat, Mar 15 2008. 01 04 AM IST
More Topics: Billionaire | Sensex | Valuation | Ambani | Realty |