Mukesh Ambani, India’s richest man, is the biggest loser among the country’s billionaires as the rupee’s slump to record lows erased 24 per cent of his fortune.
The chairman of Reliance Industries Ltd., operator of the world’s biggest oil refinery complex, has lost $5.6 billion of his wealth since May 1, as the rupee’s plunge accelerated. The 56-year-old is left with a net worth of $17.5 billion, according to the Bloomberg Billionaires Index.
The Indian rupee is the worst-performing major currency in the world in the past month, coming under pressure as international investors sold emerging-market assets amid concern the U.S. will pare its $85 billion monthly stimulus. The value of holdings by India’s billionaires are worth less in dollars as the rupee declined and foreign investors sold shares in large- cap companies, said Munesh Khanna, a senior partner at Grant Thornton LLP in Mumbai.
“There is irrationality; the rupee is weak and will go down further,” Khanna said. “Foreign institutional investors are invested in the larger-cap companies and are pulling out money from India. That is putting a lot of pressure on those companies.”
International investors have sold a net $3 billion of Indian stocks since June 3, according to the nation’s Securities & Exchange Board. The S&P BSE Sensex index declined 1.9 per cent to 17,905.91 recently, extending its four-day drop to 7.6 per cent, the most since July 2009. The rupee also extended its slide, touching an all-time low of 64.55 per dollar at the time of going to press and seemed set to slide further.
Anil Ambani, the younger brother of Mukesh, has lost 17 per cent, or $1.3 billion, of his net worth since May. Ambani, 54, has a fortune of $6.3 billion and is the country’s eighth- richest man, according to the Bloomberg ranking. The majority of his wealth is derived from stakes in publicly traded companies,
including Reliance Communications Ltd., India’s third-largest mobile-phone company by market value.
Reliance Communications reported earlier this month first- quarter profit that missed analysts’ estimates after finance costs increased because of the rupee’s weakness against the dollar. Net income fell 33 per cent to 1.08 billion rupees ($16.7 million) in the three months ended June from a year earlier, its 15th drop in profit in 16 quarters.
“Companies with large foreign-currency debt will feel the pressure and their valuations will come down,” Khanna said.
Shares of Reliance Industries, Mukesh Ambani’s most valuable asset, declined about 15 per cent from its 2013 peak on July 19. Reliance Industries’ profit beat analyst estimates for the fifth straight quarter as the rupee’s plunge boosted dollar-denominated earnings. Net income rose 19 per cent to 53.5 billion rupees in the three months ended June 30 from a year earlier, the Mumbai-based company said last month. Much of the output from Reliance’s two refineries at Jamnagar in the western state of Gujarat is exported and sold in the U.S. currency. A stronger dollar increases Reliance’s earnings in rupees.
Dilip Shanghvi, the founder of Sun Pharmaceutical Industries Ltd., India’s biggest drug maker by market value, has shed $2 billion in net worth since May, the second-biggest loser among Indian billionaires. The 58-year-old has a fortune of $10.2 billion, according to the Bloomberg index. Shares of Sun Pharmaceutical fell 16 per cent from a record on July 30 through yesterday.
Kumar Mangalam Birla, the 46-year-old chairman of Aditya Birla Group, has lost about $950 million, or 11 per cent, of his net worth since May, according to
the index. Shares of Aditya Birla Nuvo Ltd., his most valuable asset after iron-ore miner Essel Mining & Industries, plunged 17 per cent from Aug. 14 through yesterday.