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SBI valued at twice that of DFIs

19 Sep 2001

1

Mumbai: The poor performance of Indian bourses in the last one year has, of course, affected the market capitalisation of new economy and TMT stocks - but old economy shares too have taken a beating.

One such segment is development financial institutions (DFIs) and banks. Take the cases of SBI, ICICI, IDBI and IFCI for instance. (For beginners: the Sensex has, in the last one year, dropped 37 per cent from about 4,462 to the present average of 2,800).

The shares of SBI, Indias largest bank, in the period under reference, have fallen almost 45 per cent from Rs 276 to Rs. 160. However, the three DFIs had to suffer a much larger damage to their market capitalisation. Thus, the ICICI shares have dropped almost 64 per cent from Rs 116 a year ago to the present Rs 42. Those of IDBI have fallen about 54 per cent from Rs 35 to Rs 16 and that of IFCI have lost almost 70 per cent in their valuation, having fallen from Rs 10 to Rs 3.

The market capitalisation of all the four important DFIs stands at Rs 8,420 crore, Rs 3,278 crore, Rs 1,044 crore and Rs 191 crore respectively. Curiously, the sum of the market capitalisation of ICICI, IDBI and IFCI is equal to just about half of that of SBI.

With this incongruous drop in market valuations, SBI has emerged strongest in terms of market capitalisation, viewed by the market as having performed the best and likely to do so in the near future as well. Incidentally, the ICICIs price to earnings ratio at approximately 6.6 continues to be more than that of SBI, which stands at approximately 4.9.

 

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