Sensex, Nifty crumble 25% in 2011...Rupee down 16%

During the year 2011, the BSE Sensex tumbled by over 5,000 points, or ~25%, from 20561 on January 3 to 15,454 on 30th December. While the NSE Nifty dropped more than 1500 points, or ~25%, from 6157 to 4624, during the year. Investors lost a whopping Rs 20,00,000 crores in market value with the total market cap down ~28%. India was among the top losers in the Asia-Pacific region and the worst performer in the BRIC space.

Q2 FY12 GDP fell below 7% while IIP for October shrank for the first time in more than three years. India has been running a large current account gap and a yawning fiscal deficit as well. As a result, the rupee slid to all-time lows of over Rs 54 against the dollar on December 19 before recovering slightly. The rupee lost 16% in 2011 - its first annual loss since 2008.



Out of the 39 public issues that hit the street, only three managed to raise above Rs 10bn while 64%, or 17 issues were of small size mopping up funds under Rs 1bn. In contrast, 14 IPOs had managed to mobilise Rs 10bn or more during 2010. Investors lost heavily in IPOs this year with most of them giving negative returns. Only 9 out of 39 IPOs in 2011 traded above their issue price.

Though the total amount raised in 2011 through IPOs was Rs 141.12bn, their current market value is down to ~Rs 100bn, translating into a wealth erosion of ~Rs 41bn or 29%. Not only that, 28 companies with valid SEBI clearances and plans to raise over Rs 322bn have called off their IPOs due to the ongoing turmoil in the markets.

On the QIP front, only 8 issues came out during 2011, as opposed to 45 QIP issues in 2009 and 53 in 2010.

FIIs turned negative on Indian equities and pulled out ~US$380mn, from equities till December 29. They had poured in a record US$29.36bn into Indian stocks last year. On the other hand, the FIIs pumped over US$8bn into the debt market.