The super-rich club is shrinking at a dizzying pace. Over 100 billionaires (net worth of Rs 100 crore and above) have turned millionaires courtesy the decline in share prices over the last six months.
The payout declined to 22 per cent in 2007-08 from more than 24 per cent in each of the last four years, an analysis of the 657 companies, which announced dividends in the financial year ended March, showed. The sample is from the list of 2,000 companies, which have declared results, though only 657 companies announced dividends as of June 6.
The slowdown is showing on the balance-sheet. During the quarter ended March 2008, India Inc reported the lowest net profit growth in the last nine quarters, after the state-owned oil marketing and power companies declared poor results.
Companies post the slowest sales growth in four years, profits low, too. The last financial year has been the slowest year in four years for corporate India, according to the financial results for 1,354 companies released so far. Cumulative net sales grew by 18.2 per cent in fiscal 2007-08, in contrast to the 29.3 per cent growth in the previous financial year, 21.1 per cent in FY06 and a rapid 31.5 per cent in FY05.
Numbers collated by the Business Standard Research Bureau show that in the last three years, leading cement manufacturers have multiplied their nine-month profits manifold and mining and paper companies have more than doubled it.
Companies disbursing high dividends are good for investors looking for higher returns than bank deposits. High dividend-yield stocks give high dividends & the capital value increases. Dividend-yielding stocks are recommended in volatile markets as they are more stable than growth stocks. These stocks do not fall steeply in a falling market. An investor can even beat the index returns, if he invests in good dividend-yielding stocks & rebalances his portfolio from time to time.
The big flops of the year -- Reliance Power and Future Capital Holdings -- are currently available at 25 per cent below their issue price. The other major post-listing losers include BGR Energy, Shriram EPC, J Kumar Infraprojects and KNR Constructions. Among the smaller issues, Precision Pipes and Profiles, Manaksia, and Porwal Auto Components are currently available at 50 per cent below their issue prices.
Promoters of mid- and small-cap companies are grabbing the opportunity provided by a falling market to raise their holdings in their respective companies. In most cases, the shares of their companies are trading at over 30 per cent discount to the all-time high market prices.Promoters of 54 small- and mid-size firms acquired 8.3 million equity shares of their companies from the secondary market, between January 10 and February 27 this year.
The BSE Sensex bounced back by 14.8 per cent (2,261.65 points) from Tuesday's intra-day low of 15,332.42 to close at 17,594.07 on Wednesday. The index, which lost 5,874.35 points from its all-time high of 21,206.77, has retraced 39 per cent of its total losses.
The results of quarter ended December 07 are less impressive than the corresponding quarter last fiscal. However, it is premature to conclude about the overall performance of companies.
The Anil Dhirubhai Ambani Group, which is raising Rs 11,700 crore through the public offer of Reliance Power, has seen a value erosion of Rs 48,000 crore in the last seven days.
Aviation stocks - Jet Airways, Deccan Aviation, SpiceJet and Jagson Airlines - closed at their 52-week highs on the Bombay Stock Exchange on Tuesday in falling market. All the four stocks gained between 5 per cent and 20 per cent on Tuesday.
The BSE Small-Cap Index (up 34 per cent) and the BSE Mid-Cap Index (up 28 per cent) have outperformed the Sensex (up 16 per cent) in the last two-and-a-half months, while the NSE Junior Nifty (up 25.4 per cent) and the NSE Mid-Cap Index (up 30.2 per cent) have beaten the S&P CNX Nifty (up 20.4 per cent) during the same period.
Forty six new FIIs opened their offices in India during November, which is the highest ever single month registration by foreign investors. The previous highest monthly registrations took place in September 2005, when twenty nine FIIs enrolled with Sebi. The total number of FIIs registered with the regulator has increased to 1,170 from 1,124 at the beginning of the month.
The software sector has once again underlined its importance to the country by accounting for more than half of the total jobs created by Indian industry in the last financial year.
MMTC, the most valuable public sector undertaking (PSU), raced past oil exploration giant Oil and Natural Gas Corporation (ONGC) in the market capitalisation (m-cap) ranking to occupy the number-two slot on Friday. MMTC, with an m-cap of Rs 2,71,103 crore (Rs 2711.03 billion), pushed ONGC (m-cap Rs 2,64,953 crore) down by a slot to the third position in the market cap chart on BSE.
In the first 10 months of CY07, Indian firms received orders worth Rs 128,147 crore.
Till 15 days ago, only two PSUs - Oil and Natural Gas Corporation (ONGC) and National Thermal Power Corporation (NTPC) - ranked amongst the five most valuable companies. But with two more PSUs, Mineral and Metals Trading Corporation (MMTC) and National Mineral Development Corporation (NMDC), seeing sustained rise in the last three months, the number has risen to four.
Larsen and Toubro (L&T), ICICI Bank and Reliance Industries (RIL) were the top-three stocks that accounted for over 60 per cent of the 991-point gain in the Sensex between October 15 (Sensex at 19,057) and October 29 (Sensex at 19,978). Larsen and Toubro, which was the top gainer among the Sensex stocks, was also the largest contributor, adding 336.09 points to the Sensex's total gains.
The BSE Sensex has recovered 60 per cent of the last week's loss in just two trading days. The benchmark index recovered by 935 points (+56 points yesterday) and (+879 points on Tuesday) after losing 1,492 points last week between October 16 and 19.Investors, who lost Rs 4.13 trillion (Rs 4.13 lakh crore) in just three trading days last week, have recovered 70 per cent of their loss or Rs 2.90 trillion (Rs 2.90 lakh crore) in the first two trading days of the current week.
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