IPOs fail to deliver the money

72 per cent scrips lose all gains made in a month.

Seventy-two per cent of the stocks are back to square one in just a month. They have wiped out all the gains made when the Sensex touched its lifetime high of 14,678 on February 8.

The worst-performing stocks are automobiles, cement, steel, real estate, construction, infrastructure, chemicals, textiles, pharmaceuticals, aluminium, copper, offshore shipping, airways, housing, fast-moving consumer goods, public sector banks, oil refining companies and sugar.

But for a handful of stocks such as Reliance, Bharti Airtel, ICICI Bank, HDFC, Kotak Mahindra Bank and a few others, investors would have been much worse off.

The first blow came from the sugar sector from April 2006 onwards. Bajaj Hindusthan, which was ruling around Rs 550 touched a low of Rs 250 in June 2006 and further slumped to Rs 170. So was the case with Balrampur Chinni and other sugar stocks. The reasons for sugar stocks leaving a bitter taste are excess supply and a sharp decline in global prices.

Metal stocks were the other big loser. The acquisitions by Tata Steel and Hindalco, coupled with a decline in global prices of steel and non-ferrous metals pushed metal stocks back to the lows seen seven months ago. The Tata Steel scrip is now back to the June 2006 level after steel manufacturers rolled back prices.

The cement stocks are also on a slippery slope after the government cut customs duty by 12.5 per cent. They were spooked by a possible ban on cement exports.

The dual excise duty in the Budget to curb price rise completed the rout. India Cements, Grasim, Gujarat Ambuja, ACC and many others fell between 25 per cent and 50 per cent in a month.

Automobile stocks are on a crash course too. Tata Motors is now quoted at its lowest level of June 2006, while TVS Motors has gone far below Rs 50. Maruti too has fared badly, as did Hero Honda and Bajaj Auto.

Among the FMCG scrips, Hindustan Lever, Colgate, Gillette, Tata Tea, Nirma and many others have declined by over 30 to 40 per cent and most of them have gone below the June 14 levels.

Chemicals and fertilisers is the other sector which has gone out of favour. Nagarjuna Fertilisers has fallen to its original level of Rs 10 from a high of Rs 19.

Construction and real estate stocks such as Unitech, Sobha Developers, Parsvanath and Lok Housing have dropped by over 50-80 per cent.