Brazilian crisis hits Indian GDRs

MUMBAI, JAN 16: The Barzilian currency crisis pulled down the prices of global depository receipts (GDRs) of Indian companies listed abro...

MUMBAI, JAN 16: The Barzilian currency crisis pulled down the prices of global depository receipts (GDRs) of Indian companies listed abroad last week. Reflecting the negative impact of the Brazilian currency crisis on the sentiment of GDR market makers, the Skindia GDR index nose-dived by 4.43 per cent to close at 619.24 points on January 14.

During the period between January 7-14, the spreads of the 37 actively traded GDRs marginally narrowed down to 8.56 per cent from 8.69 per cent registered on January 7. The Skindia GDR index and the 30-share Sensex moved in a narrow band of 9.79 per cent and 4.28 per cent respectively during the week.

Interestingly, as the price erosion witnessed by the underlying shares was less compared to the GDRs the average premiums of the 60 GDRs declined to a low of 2.13 per cent against the previous week’s close of 3.25 per cent. The Skindia GDR premium index closed at 14.23 per cent to register a net loss of 27.21 per cent over its previous week’s close. However, during thesame period the Skindia GDR price earning (PE) index closed on a positive note at 26.22 points registering a meagre gain of 1.65 per cent.

Story continues below this ad

IPCL was the star performer of the week, with its GDR appreciating by 26.19 per cent to close at $ 5.30. News of Reliance picking up a substantial chunk of IPCL at the local markets at a huge premium to the prevalent market price led to the initial sporadic buying at the counter, followed by a sharp jump in the stock price.

Similarly, the GDRs of Telco and Century Textiles continued their upward ride in the northward direction registering substantial recovery of 15.9 per cent and 9.76 per cent respectively. "Telco got a further impetus when the Maharashtra government granted sales tax concession on the sales of Indica, as a result the GDRs of Telco gained 14.61 per cent on January 14," explained a senior analyst of Skindia Finance.

GDRs of the cable sector were the highest gainers during the week appreciating by over 4.19 per cent followed by auto sector GDRs whichrose by 3.49 per cent and steel sector GDRs appreciated by 2.78 per cent. GDRs of Finolex Cables touched a new 52 week high of $ 5.70 on January 13.

The top losers were GDRs of telecom, cement and power sector which lost by 13.33 per cent, 6.3 per cent and 6.02 per cent respectively. GDRs of VSNL dipped by over 18.10 per cent to close at $ 10.75.