‘Most of these investments happened under a bull market euphoria and at peak levels,’ said Jagannadham Thunuguntla, chief executive of SMC Capitals.

1. Investments go awry, $4.38 bn lost in two years
New Delhi | February 02, 2009 7:05:06 PM IST
New Delhi, Feb 2 (IANS) The ongoing turmoil in Indian equities markets has resulted in
investments by financial institutions turning red, with about $4.38 billion washed away
between September 2006 and January this year, said a brokerage firm’s report released
Monday.
Market value of about $6.5 billion worth investments made under the qualified
institutional placement norms in September 2006 has reduced to $2.12 billion by January
2008, said the report by the Delhi-based SMC Capitals, India’s fourth largest share
brokerage firm.
‘Most of these investments happened under a bull market euphoria and at peak levels,’
said Jagannadham Thunuguntla, chief executive of SMC Capitals.
Real estate is the worst-hit, with 88.08 percent of the money invested losing its value in
what many term as the ‘most difficult times ever’.
According to the report, $153.17 million invested in the Delhi-based realtor Ansal
Properties and Infrastructure (API) in September 2006 has lost 95.65 percent of its value
and was worth only $6.65 million in January 2008.
API’s scrip dropped from Rs.505 per share in 2006 to Rs.24 per share now.
Another infrastructure developer, Mahindra Lifespaces, has also turned to be a bad bet
for investors as $105.01 million invested in the company during the same period was
worth only $16.66 million in January 2008, a drop of 84.14 percent in value.
Media companies also did not fetch good returns, with value of such investments falling
75.29 percent in the period under consideration.
The erosion in wealth was there across sectors but differed in magnitude. The BFSI
(banking, financial services and insurance) sector lost about $1.29 billion, while the
energy sector suffered a loss of $709 million.
Citi group, State Bank of India, Fidelity and ICICI Ventures are the leading losers in the
financial sector and they might find it too difficult to recover the investment fully, the
report said.

2. ‘Chances of recovery are dim and it may take as long as three to four years,’
Thunuguntla said.