Falls Only 20% Compared To 30% Drop By Sensex
Not only have they managed to raise IPO money easily in London, now their stock prices too appear to have taken a ‘comparatively’ lesser hit. India-focussed companies listed on London’s AIM (Alternative Investment Market) have managed to stomach the correction in stock prices, better than sensex companies. This means, on an average, investors in these India-focussed companies would have lost less than investors in sensex companies.
Prominent companies, that are a part of AIM India Index compiled by The Times of India, are power project development firm KSK Power Venture, Bollywood film content distributor company Eros International, IT & ITeS dedicated SEZ investment firm Unitech Corporate Parks and Noida Toll Bridge Company, the operator of the Delhi Noida Expressway. Companies operating in NICE areas such as Dhir India Investments that invest in under performing assets and companies in India or gaming firm DQ Entertainment are also included in this index.
While the 30-share sensex has fallen close to 30% from January 10 (sensex hit its all time high of 21206 that day), the ‘AIM India Index’ — comprising 19 companies having business interests related to India has outperformed its much hallowed counterpart by falling only 20%, an analysis shows. AIM understands operating businesses better. Most investors on AIM are large institutions who are willing to wait for profits and cash-flows 3-4 years down the line and thus do not engage in active trading on a day-to-day basis.
Most stocks run up during bull runs, but only during the downturn is their true worth visible, feels many investment experts. In that light, the difference of 10% between ‘AIM India Index’ and sensex is extremely important. The trend also indicates that investor wealth was perhaps better preserved in equity markets such as AIM. In fact, if we remove the 6 real estate companies from the ‘AIM India Index’ (made of companies which have trading history from January 2008) — the fall will be much less sharper.
Excluding realty, the AIM India Index has fallen by less than 10% in just over 7 months in a scenario where major equity markets have lost anywhere between 20-50%. AIM listed realty companies are largely structured as funds and not operating companies. To that end, they should typically be less prone to swings in stock price.
The BSE Realty Index, tracking real estate companies, has fallen by over 62% from January 10 this year while the AIM listed realty companies focussed on India have fallen by 40% on an average, data from the analysis shows.
The AIM listed desi companies have also fallen less than the FTSE AIM All-Share Index (that tracks all AIM listed companies). In fact, AIM India Index performance is in line with the FTSE AIM 100 index, which tracks the top 100 companies listed on AIM. This performance could be the result of differences in perception. India is a consumption-driven story compared to others, which are more of investment-driven plays.
Not only have they managed to raise IPO money easily in London, now their stock prices too appear to have taken a ‘comparatively’ lesser hit. India-focussed companies listed on London’s AIM (Alternative Investment Market) have managed to stomach the correction in stock prices, better than sensex companies. This means, on an average, investors in these India-focussed companies would have lost less than investors in sensex companies.
Prominent companies, that are a part of AIM India Index compiled by The Times of India, are power project development firm KSK Power Venture, Bollywood film content distributor company Eros International, IT & ITeS dedicated SEZ investment firm Unitech Corporate Parks and Noida Toll Bridge Company, the operator of the Delhi Noida Expressway. Companies operating in NICE areas such as Dhir India Investments that invest in under performing assets and companies in India or gaming firm DQ Entertainment are also included in this index.
While the 30-share sensex has fallen close to 30% from January 10 (sensex hit its all time high of 21206 that day), the ‘AIM India Index’ — comprising 19 companies having business interests related to India has outperformed its much hallowed counterpart by falling only 20%, an analysis shows. AIM understands operating businesses better. Most investors on AIM are large institutions who are willing to wait for profits and cash-flows 3-4 years down the line and thus do not engage in active trading on a day-to-day basis.
Most stocks run up during bull runs, but only during the downturn is their true worth visible, feels many investment experts. In that light, the difference of 10% between ‘AIM India Index’ and sensex is extremely important. The trend also indicates that investor wealth was perhaps better preserved in equity markets such as AIM. In fact, if we remove the 6 real estate companies from the ‘AIM India Index’ (made of companies which have trading history from January 2008) — the fall will be much less sharper.
Excluding realty, the AIM India Index has fallen by less than 10% in just over 7 months in a scenario where major equity markets have lost anywhere between 20-50%. AIM listed realty companies are largely structured as funds and not operating companies. To that end, they should typically be less prone to swings in stock price.
The BSE Realty Index, tracking real estate companies, has fallen by over 62% from January 10 this year while the AIM listed realty companies focussed on India have fallen by 40% on an average, data from the analysis shows.
The AIM listed desi companies have also fallen less than the FTSE AIM All-Share Index (that tracks all AIM listed companies). In fact, AIM India Index performance is in line with the FTSE AIM 100 index, which tracks the top 100 companies listed on AIM. This performance could be the result of differences in perception. India is a consumption-driven story compared to others, which are more of investment-driven plays.
