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Falling markets shrink super rich club

By Deepak Korgaonkar in Mumbai
July 05, 2008 02:02 IST
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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 stock market had taken personal fortunes to dizzying heights on January 8 this year when the Bombay Stock Exchange Sensitive Index touched its all-time peak, and the number of Indian billionaires had soared to 522.

Six months later, the number is down to 421. The 101 billionaires at that time have seen their wealth erode by 20 to 65 per cent in this period courtesy the 35.6 per cent fall in the Sensex.

Some of the new reluctant millionaires include Usha and Suresh Shah of Consolidated Constructions, Gaurang Gandhi of Pioneer Investcorp, Anuradha Shukla of Bag Films, the Kansagra family of SpiceJet and Siddharth Sriram of Mawana Sugars.

The market wealth or net worth has been calculated on the basis of the promoters' holding in their respective companies as on March 31, 2008, and the difference in the market price -- as on January 8 and on July 4 this year. The calculations ignore cross-holdings. The issue price is considered a market price for companies listed after January 8.

In US dollar terms too, the number of billionaires has halved from 64 to 32. The dollar appreciated 9.83 per cent -- from Rs 39.28 on January 8 to Rs 43.14 today.

Even the multi-billionaires, including the Ambani brothers, have not been spared. Reliance ADAG Chairman Anil Ambani is the biggest loser as his wealth declined by Rs 1,37,690 crore since the January 8 peak of Rs 2,53,567 crore. Anil Ambani's wealth as on January 8 is based on the adjusted initial public offer (IPO) valuation of Reliance Power of Rs 281.25 per share.

Reliance Power's current valuation is after adjusting for the 3:5 bonus issue.

His elder brother, Mukesh Ambani, has been less affected by the 36 per cent fall of the Sensex. The senior Ambani's wealth declined by 31 per cent to Rs 2,15,374 crore from Rs 3,13,263 crore.

Predictably, promoters of real-estate and infrastructure companies are the worst-hit with the market wealth of their companies eroding by over 50 per cent.

K P Singh & family of DLF, Ramesh Chandra of Unitech, Sameer Gehlaut of Indiabulls, Jaiprakash Gaur of JP Associates, S P Jain of Jai Corp and G Bhaskara Rao of Lanco Infratech are among the worst-affected, with their individual net worth almost halving.

While Unitech's Chandra has lost the most at 68.38 per cent, G M Rao of GMR is a close second (64.89 per cent). Following them are K P Singh and family (63.97 per cent), Gautam Adani  (58.27 per cent) and Suzlon's Tulsi R Tanti at 57.73 per cent.

With the market turbulence showing no signs of petering out, the number of billionaires-turned millionaires is only expected to swell, market analysts feel.

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Deepak Korgaonkar in Mumbai
Source: source