November 8 was a sad day? Well, not for D-Street; investors made Rs 35 lakh crore
Sensex had plunged over 1,800 points in eight sessions following the announcement.
- Rahul Gandhi, Vice-President, Congress
The historic ban on high-value currency notes announced by Prime Minister Narendra Modi on November 8 last year jolted the whole nation as well as investing community.
Domestic equity benchmark Sensex plunged over 1,800 points in eight sessions following the announcement.
Analysts feared the note ban would damage India’s consumption story and slow down economic growth. All of that materialised to some extent.
But the turnaround came quickly. And normalcy has been restored largely in the money markets and the financial system. And domestic equity market bounced back to reward the patient equity investors with solid returns in the last year.
The market capitalisation of the BSE-listed companies have surged by nearly Rs 35 lakh crore to Rs 146.23 lakh crore as of November 6, 2017 from Rs 111.45 lakh crore on November 8 last year.
Demonetisation acted as a catalyst, channelling savings into the financial markets, which coupled with diminishing returns across other asset classes is likely to keep the Indian equity market buoyant, says Pankaj Pandey, Head of Research, ICICI Securities.
It surely had a cost, says global financial services firm DBS Bank. The positive spillovers include rising digital transactions and a sizeable increase in bank deposits, it said.
A couple of stocks multiplied investors’ wealth many fold during this period.
The chart topper was Indiabulls Ventures, which surged 1,147 per cent between November 8, 2016 and November 6, 2017.
Others included HEG (up 1011 per cent), Sanwaria Consum (up 762 per cent), Goldstone Infratech (up 720 per cent), Graphite India (up 686 per cent), Goa Carbon (up 653 per cent), Rain Industries (up 559 per cent), Jindal Worldwide (up 559 per cent) and California Soft (up 550 per cent). Besides these, more than 150 other stocks surged between 100 to 550 per cent on NSE.
The painful part is less visible. Some 60 stocks on NSE slipped over 50 per cent in this period.
Top losers included Shilpi Cable (down 91 per cent), Sri Adhikari Bros (down 90 per cent), Videocon Industries (down 85 per cent), Religare Enterprises (down 83 per cent) and JMT Auto (down 77 per cent) – and most of them had reasons other than demonetisation to blame.
Institutional investors held on, and continued their buying spree all through. Foreign portfolio investors pumped in over Rs 10,000 crore in domestic equity markets since the shock demonetisation, while domestic institutional investors poured in over Rs 1,00,000 crore.