Floods in God's own country costing not only Kerala but also many stocks on Dalal Street
CM Pinarayi Vijayan pegged overall loss at Rs 8,316 crore so far due to the floods.
According to reports, tea, coffee, cardamom and rubber planters have already run up losses to the tune of Rs 600 crore so far.
Chief Minister Pinarayi Vijayan pegged the loss at Rs 8,316 crore so far due to the floods, said a PTI report.
Vijayan submitted a memorandum to Union Home Minister Rajah Singh, who visited the state on August 12.
Kochi-based investor Porinju Veliyath told ETMarkets.com that Kerala is going to be different after this flood.
"The state had never witnessed this kind of natural disaster in many centuries. Right now, things are not worsening after three days of huge suffering. Tens or thousands of people are trapped at different locations. Thousands of people are under fear that they may die if water level rises further. However, the central government, the Army and Navy are doing a good job. People have lost everything," he said.
There is a market angle too. Kerala is home to many listed companies with robust top line as well as bottom line.
Avinash Gorakshakar of Joindre Capital tweeted: “Companies likely to be impacted due to Kerala floods are banks including South Indian Bank and Federal Bank, which account for 40-45 per cent of their business from Kerala.”
Gorakshakar made a mention of Muthoot Finance with 650 branches in the state, along with Manapurram’s 15 per cent.
Tyre companies especially are set to take a hit as raw material rubber is chiefly sourced from Kerala. Ramco Cement also has a large exposure to Kerala.
The torrential rains are already taking a toll. Rubber output in India, the world’s sixth-biggest producer and second-largest consumer, is likely to fall 13.5 per cent to 6,00,000 tonnes in 2018-19 from a year ago.
"In July, rubber production was hit by rains. Now, with the situation worsening in August, farmers again cannot tap rubber trees," Rajiv Budhraja, DG, India's Automotive Tyre Manufacturers' Association, told Reuters.
The weather office expects widespread rains in Kerala until Saturday. Kerala has issued 'red alert' for 13 districts out of the 14, ANI reported.
G Chokkalingam, founder, Equinomics Research and Advisory, said, “Impact on industrial activities will be very limited. However, there will be a temporary impact on companies which are dependent on copra (Marico) and rubber (tyres companies). It will not impact banks like South Indian Bank and Federal Bank.”
He further explained that banks in Kerala will not get affected as they cater largely to service sector and NRI deposits. "Floods will not have much impact on Indian economy at all," he added.