Investments made by financial institutions between 2006 and 2008 lost $4.38 billion in value as the Indian stock market turned downward. Real estate investments fared the worst, with 88% losing value. For example, $153 million invested in Ansal Properties and Infrastructure in 2006 was worth only $6.65 million by 2008, a 95.65% drop. Across sectors, banking and financial services losses totaled $1.29 billion while energy sector losses reached $709 million. The report estimates it could take 3-4 years for investments to recover much of their lost value.

1. Investments go awry, $4.38 bn lost in two years
The ongoing turmoil in Indian equities markets has resulted in investments by financial institutions
turning red, with about $4.38 billion washed away between September 2006 and January this year,
said a brokerage firm's report released Monday.
Market value of about $6.5 billion worth investments made under the qualified institutional
placement norms in September 2006 has reduced to $2.12 billion by January 2008, said the report
by the Delhi-based SMC Capitals, India's fourth largest share brokerage firm.
'Most of these investments happened under a bull market euphoria and at peak levels,' said
Jagannadham Thunuguntla, chief executive of SMC Capitals.
Real estate is the worst-hit, with 88.08 percent of the money invested losing its value in what many
term as the 'most difficult times ever'.
According to the report, $153.17 million invested in the Delhi-based realtor Ansal Properties and
Infrastructure (API) in September 2006 has lost 95.65 percent of its value and was worth only $6.65
million in January 2008.
API's scrip dropped from Rs.505 per share in 2006 to Rs.24 per share now.
Another infrastructure developer, Mahindra Lifespaces, has also turned to be a bad bet for investors
as $105.01 million invested in the company during the same period was worth only $16.66 million in
January 2008, a drop of 84.14 percent in value.
Media companies also did not fetch good returns, with value of such investments falling 75.29
percent in the period under consideration.
The erosion in wealth was there across sectors but differed in magnitude. The BFSI (banking,
financial services and insurance) sector lost about $1.29 billion, while the energy sector suffered a
loss of $709 million.
Citi group, State Bank of India, Fidelity and ICICI Ventures are the leading losers in the financial
sector and they might find it too difficult to recover the investment fully, the report said.
'Chances of recovery are dim and it may take as long as three to four years,' Thunuguntla said.
( © IANS / India eNews)
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