Infrastructure Sector belies the initial hope of Investors
After remaining at a high during the past few months over a period of last 52 weeks, the shares of infrastructure companies are slowly falling down. Share prices in the infrastructure sector had touched a new high after the Modi Government was sworn in.
The initial euphorbia seems to have dwindled and markets are slowly declining.
Drastic Shift in the Market
Among the companies whose stock prices have shown a downward trend in the recent months, the prominent ones are Lanco Infratech Ltd, GMR Infrastructure Ltd and Punj Lloyd Ltd among others.
The stock prices of these companies had touched a new high during the May-June timeframe. A reason for this hike was the hope from the BJP government that immediate steps would be taken to remove the obstacles which companies face in the infrastructure sector. However, lately it has emerged that even if any of this was to happen; it would be a gradual process and would take time.
This has led to fall in share prices of Lanco Infratech Ltd by around 54 percent, GMR Infratech Ltd by 47 percent and Punj Lloyd by around 37 percent.
These figures are as of November 21st and show a considerable fall in prices in comparison to the trend witnessed during May-June quarter. The market capitalization of these firms has therefore gone down by 20,703 crores.
The benchmark Sensex however has risen to a new high and closed at 28,334 points on Friday. Vishwas Udgirkar, a market analyst explains that the expectations from the new government were very high and as the same were not met, the markets have crashed and responded accordingly.
Range of Industries Affected
Among the other infrastructure segments affected by this development, the worst sufferer has been the road industry. The gravity of the situation can be understood from the fact that around 20 road projects worth 27,000 crores have been hanging fire for the last two years. No private developer is ready to try their luck in implementing these projects and the situation remains grim in the current scenario too.
However, as some foreign funding from World Bank and Asian development Bank is in pipeline in the coming days, the scenario might undergo some change.
Source: Live Mint
