It seems that Anil Dhirubhai Ambani Group’s Reliance Power issue was launched to take away the complete sheen from the Indian stock markets. In fact, it is a strange coincidence that since the day of the issue, Indian investors have lost more than Rs 17 trillion in the stock markets!!! It has been, by far, the sharpest fall for the Sensex. After scaling a new high of 21,206 on January 10, it crashed to 15,322.54 at 11.55 am on January 22, before some recovery. But by then, the markets had already lost a fourth of their worth. Like on most such occasions, the fall was triggered primarily by the Foreign Institutional Investors (FIIs) who had gone in for a collective selling binge. In five days, the FIIs collectively pulled out a staggering Rs 10,500 crores from Indian stock markets, stripping most of the blue chip stocks. Though domestic investors tried their best to hold the markets at sustainable levels, they too failed in their efforts. Incidentally, the fall was not unique to India a...
Dr. Arindam Chaudhuri
(An IIPM Think Tank Blog)