These 5 stocks eroded at least half of their value in 2020

These 5 stocks eroded at least half of their value in 2020

MUMBAI: While the domestic equity market had a stellar run this year despite the Covid-19 pandemic, some stocks still eroded half or more value for the year-to-date.

Up nearly 14 per cent in 2020, equity benchmark Sensex is at a record high level. From its March lows, the index has recovered nearly 83 per cent.

However, five of the BSE 500 stocks eroded at least 50 per cent value since the start of 2020, and such erosion was largely due to reasons specific to the company or the group. In most cases, it was accompanied by falling institutional participation.

Here’s a quick look at the top wealth destructors among of 2020, among the BSE 500 pack:

Future Retail, Future Consumer: These two stocks eroded most wealth among BSE 500 stocks for the year 2020, as they dropped 78 per cent and 58 per cent value for the year-to-date. This underperformance is despite the stocks recovering 23 per cent and 51 per cent from their 52-week lows seen in early April. The rapid stock erosion was after the deal with Reliance Industries (RIL) in late August. RIL announced its unit Reliance Retail Ventures (RRVL) will acquire the retail & wholesale business and the logistics & warehousing business from the Kishor Biyani-promoted Future Group as going concerns on a slump sale basis for a lumpsum total consideration of Rs 24,713 crore. The deal was a complex one – involving various inter-company transactions, and actually didn’t leave much on the table for the shareholders of the Future Group companies, analysts said.

GE Power India: GE Power India dropped 62 per cent in 2020, logging its worst yearly performance in a decade. The shares saw a huge decline in October after its parent’s decision to exit the thermal power business. However, foreign institutional investors (FIIs) upped their stake in the company in the last two quarters to 3.49 per cent.

Punjab National Bank (PNB): State-run lender PNB witnessed a decline of 51 per cent for the year-to-date, eroding value for the third year in a row. A weak earnings profile, operational issues and diluted franchise render PNB a structurally challenging investment proposition, Edelweiss said in a November 4 report.

Raymond: Fabric and fashion retailer Raymond has eroded around 50 per cent value for the year-to-date after posting losses for three straight quarters. The stock has also logged losses for three years in a row. Earlier this month, PTI quoted Chairman and Managing Director Gautam Hari Singhania saying the group was “cautiously optimistic” about recovery amid the Covid-19 pandemic.

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