The Hindu Business Line : VSNL, Sterlite

The Indian ADRs displayed mixed fortunes in 2007 at the US bourses. The average return posted by the Indian ADRs stood at 18.72 per cent but that outperformed most of the global benchmarks. The New York Asian ADR index, comprising almost all the Indian ADRs, posted a return of 5.43 per cent while the Dow Jones Industrial Average returned 7.24 per cent and the tech-focussed Nasdaq gave out a return of 10.73 per cent in 2007. But that looked minuscule when compared with the BSE Sensex and the NSE Nifty, which posted a return of 46 per cent and 53 per cent respectively.

Star performers

The star performer of 2007 is VSNL; the ADR posted a whopping return of 96 per cent. The other telecom major MTNL, on the other hand, jumped 45 per cent.

Sterlite Industries, which got listed during mid-June, was the second best performer by posting a return of 95 per cent since its listing. It may be recalled that Sterlite Industries had raised $1.75 billion through its ADR issue.

Banking counters – HDFC Bank and ICICI Bank – have also scored handsome gains of 74 per cent and 47 per cent respectively. The under-performance of ICICI Bank vis-À-vis HDFC Bank was mainly due its huge follow-on public issue through which it raised in excess of $2 billion.

Big losers

While Infosys Technologies, Wipro and Patni Computers declined at the US bourses, Satyam Computer bucked the trend.

The Satyam ADR posted a return of 13 per cent as against Infy’s negative return of 16.5 per cent, Wipro’s negative 6 per cent and Patni Computers’ minus 18 per cent.

The biggest losers were from the Internet space. While Sify Ltd fell by whopping 44 per cent, Rediff.com crashed 39.5 per cent.

Premium/Discount

The sharp gain of the rupee against the dollar seemed to have impacted the premium or discount of Indian ADRs.

Despite divergent trend by these counters in domestic and the US bourses, most of the Indian ADRs are ruling around the previous year’s premium/discount levels only.

Satyam ADR commands higher premium of 19 per cent with respect to its underlying on the BSE.

Its premium stood at 9.8 per cent last year.

Wipro ADR is ruling at a premium of 13 per cent against last year’s 18 per cent.

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