Financial Daily from THE HINDU group of publications
Thursday, Oct 09, 2003
Financial Daily from THE HINDU group of publications Thursday, Oct 09, 2003 |
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Financial Institutions Markets - Stock Markets Money & Banking - Financial Institutions Bull run inflates FIs equity portfolio Suresh Krishnamurthy
BL Reseach Bureau THE stock market rally has added about Rs 1,350 crore to the equity portfolio of ICICI Bank, IDBI and IFCI. The broad-based market rally in the last six months has inflated the market value of the equity portfolios of ICICI Bank, IDBI and IFCI. A portion of the portfolio of these three institutions, for which the holdings of these institutions are available, has risen by at least 100 per cent between April and September 2003. The bull run in the Government securities market in the last couple of years bestowed unprecedented gains for public sector banks. It is now the turn of financial institutions. The only difference is that the stock markets, rather than the debt markets, are doing the star turn. Industrial Development Bank of India has gained the most from the broad based market rally. The value of a portion of its portfolio has risen by nearly Rs 725 crore. ICICI Bank follows with a gain of nearly Rs 420 crore. IFCI's portfolio gain of about Rs 225 crore is the least among the three. If the stocks forming part of the portfolio are offloaded in the market place then their net worth coverage for their non-performing assets will rise. In all the three cases, details are available only for a portion of their equity portfolio. As a proportion of the value stated in the books at the end of March 2003, these stocks represented 38 per cent of the portfolio for IFCI, 18 per cent for IDBI and 16 per cent for ICICI Bank. This suggests that the extent of improvement in portfolio value may even be significantly higher. A bulk of the gains has come from a handful of stocks. In the case of ICICI Bank, the price rise of stocks of MRPL and Ispat Industries accounts for 65 per cent of the gains. Similarly, for IDBI, stocks of MRPL, TNPL, Tata Teleservices and Ispat Industries account for 65 per cent of the gains. In the case of IFCI, stocks of LIC Housing Finance, Indo Rama Synthetics, Ispat Industries and Welspun India account for 68 per cent of the gains.
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