Stocks that ruined investors in a year that saw Sensex grow 92%

Stocks that ruined investors in a year that saw Sensex grow 92%

NEW DELHI: In exactly a year till day since March 23 last year, the Covid pandemic may have disrupted a lot in the economy, businesses, markets and life in general. Yet, fortunately, not many stocks destroyed investor wealth on Dalal Street.

Among those who did, an overwhelming majority happened to be either defunct companies or those with little resources. BSE Sensex has risen 92 per cent during this period and Nifty 94 per cent.

BSE’s total market-capitalisation swelled by Rs 102 lakh crore from Rs 101 lakh crore on March 23, 2020 to Rs 203 lakh crore as of March 19, 2021.

Out of the 2,200 odd regularly traded stocks on BSE, barely 130 gave negative returns for last one year. Understandably, many of them are penny stocks, and names that even novice investors avoided.

The significance of this wealth destruction gets less pronounced when you consider the fact that most of these names actually fell even before the Covid-19 breakout caused the market to crash. This means they failed to look up even when the entire market rallied to grow equity investors’ wealth by a whopping Rs 100 lakh crore.

A&M Febcon, 7NR Retail, Devhari Exports, Otco International, Jump Networks, BC Power Controls, Suncare Traders, Meenakshi Enterprises and Mitshi India are some of the stocks that burnt 70-90 per cent of investor wealth in the year since March 23, the day the benchmark indices hit their lowest points on Covid panic.

Among more established names that saw big drop in share prices during this period were India Nivesh, Majesco, YES Bank, Future group stocks, many of the hotel stocks and realty player Omaxe.

IndiaNivesh: The company that used to provide broking and PMS services became one of the first casualties of the Covid-19 pandemic and shut shops in April last year. The stock tumbled following the event and now trades at Rs 11.50, down 70 per cent from the year-ago level.

Majesco: At face value, the stock may seem to have fallen 67 per cent during this period, but that is largely because the price got adjusted following a massive dividend payment. The company sold most of its assets and decided to distribute the proceeds among shareholders. However, the scrip has bounced back from its 52-week low and trades nearly 33 times that level (according to adjusted price).

YES Bank: Shares of Yes Bank have been under pressure for over a year now. In February last year, the lender was bailed out by a consortium of banks. The stock has not been able to come out of that event, even though it has started reporting better numbers every quarter. The scrip is down 62 per cent in last one year.

Future Lifestyle, Future Retail, Future Supply, Future Consumer: These stocks from Future Group have been among the biggest wealth destroyers of last one year, as the group reeled under massive debt and uncertainty over its asset sale to Reliance Industries. These stocks plunged in the range of 32-62 per cent in the last one year.

Omaxe: The fall in the prices of the stock has been a puzzle on Dalal Street. It is down over 55 per cent in the last one year, and there is no particular reason for it. The company said it was not aware of any reason behind the fall and said the price movement is “purely due to market conditions and based on demand-supply principles.”

Hotel stocks: A number of hotel stocks figure among the top wealth destroyers as travel virtually came to standstill and no one stayed in hotels. The stocks have since recovered some bit, but not enough as the situation has not gone back to the pre-pandemic levels. Ras Resorts & Apart Hotels, Chalet Hotels and Asian Hotels (West) are some of the names that are down 18-32 per cent in the last one year.

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