Indian ADRs lose $6-bn of market value

ADRs gave negative return to investors as counters performed poorly due to decline in equity market.

Shares of Indian companies trading on American bourses took a severe beating last month,as their overall market valuation tumbled by nearly USD six billion during March 2012 amid gloomy global market conditions.

During the month,the 15 Indian entities listed on the New York Stock Exchange and Nasdaq saw their cumulative market value plummet by a staggering USD 5.69 billion. This followed a collective loss of about USD 120 billion during entire 2011.

While companies like Tata Motors and Sterlite Industries witnessed considerable decline in their valuations,Dr Reddy’s Laboratories,WNS Holdings and Genpact witnessed an increase in their respective market capitalisation in March 2012.

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“Indian ADRs gave negative return to investors in March as the counters performed poorly due to the decline in the Indian equity market,” CNI Research Head Kishor Ostwal said.

American Depository Receipts (ADRs) are bought and sold on American markets just like stocks and are issued by a bank or brokerage firm.

WNS’ market capitalisation rose by USD 47 million to USD 536 million,while that of Genpact grew by USD 40 million to USD 3.63 billion. Besides,the valuations of Dr Reddy’s Laboratories surged by USD 25.67 million to USD 3.63 billion.

Although,the US market also saw a decline during March,the performance of Indian ADRs mostly mirror the trends in the Indian stock markets,Ostwal noted.

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In March,the US benchmark index Dow Jones Industrial Average (DJIA) lost about 1.79 per cent to close at 13,212 points,whereas India’s key 30-share Sensex index lost two per cent to 17,404.20 points.

State-run telecom firm MTNL,which has been facing tough competition from rivals,was the worst performer among the ADRs in terms of the erosion in value on a percentage basis,while Tata Motors was the worst-hit in absolute terms.

Tata Motors saw its market capitalisation falling by USD 2.47 billion to a total of USD 85.6 billion,while that of Sterlite Industries plunged by USD 1.3 billion USD 7.18 billion.

In the banking sector,ICICI Bank’s market capitalisation tumbled by USD 830 million to USD 20 billion,while that of HDFC Bank went down by USD 179 million to USD 26.61 billion.

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Among technology majors,Infosys witnessed a loss of USD 486 million in market value to USD 32.6 billion,Wipro’s valuation declined by USD 269 million to USD 26.88 billion and Patni saw a fall of USD 36 million to USD 1.27 billion.

Tata Communications’ ADRs lost USD 106 million,while MTNL was down by USD 85 million to USD 321 million.

The valuations of Sify Technologies and Reddif.com fell by USD 28 million and USD 3.52 million respectively,to USD 173 million and USD 185 million.

EXLService Holdings saw a loss of USD 11 million in market capitalisation to USD 862 million.

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