Indian AIM stocks returned 2.5 times your money this year

Wednesday, October 21, 2009 | Posted by: Grant Summers
Categories: | Tags: India, Grant Thornton, LSE, South Asia Group, India Price Index, Anuj Chande, AIM, Capital Markets, Fiona Owen, London Stock Exchange, KSK, Cross border, India Hospitality Corp

Grant Thornton’s latest India Watch Index reveals that the share prices of Indian companies listed on the London Stock Exchange (LSE) have collectively outperformed both the AIM 100 and the FTSE 100. The India Watch Index has soared by 153% in the year-to-date, following a 36% rise in the third quarter of 2009.

We are using India Watch, launched in conjunction with the London Stock Exchange, to monitor the UK/India business relationship through both cross border M&A between India and the UK and the performance of Indian firms listed on the LSE, with a tracker that focuses on the performance of the Main Market and AIM versus listed Indian firms since 1 January 2007.

In the first three quarters, the India Watch Index rose nearly three times higher than the AIM All-Share Index and about ten times higher than the FTSE 100, which had risen by 55% and 16% respectively since January 2009.  Since January 2007, the India Watch Index recorded a rise of 27%, compared to a drop of 41% in the value of AIM 100 shares and a loss of 18% for the FTSE 100. 

Soaring Indian stocks have lead our India Watch Index to end the third quarter more than 2.5 times higher than it was at the start of 2009. This interest in AIM-listed Indian stocks parallels the ever increasing inflows by foreign institutional investors into the Indian stock markets, which have crossed over US$11 billion in the year to date.

In the first three quarters of 2009, the best performing stocks in India Watch included Naya Bharat Property, OPG Power Ventures and Vedanta Resources with stock market gains of 284%, 298% and 211% respectively. Interestingly, the best performers vary dramatically in size: Vedanta Resources is the largest stock in India Watch with a market capitalization of £5.2 billion at the closing price of 1902 pence per share. OPG Power Ventures is in the mid range with a value of £234 million at the closing price of 81.5 pence per share, while Naya Bharat Property at the lower end of the spectrum with its closing price of 27 pence per share translating to a market capitalisation of £14.6 million.

Obviously, late monsoons with weaker rainfall provide challenges both for the agricultural sector and India’s hydroelectric power supply. At the same time, the outlook brightens against the backdrop of a global economic recovery as well as clear election results providing a strong government mandate in India.

Performance of Indian companies on the London Stock Exchange since January 2007*

Year to date performance of Indian companies on the London Stock Exchange - 1 January - 30 September 2009

Top performing companies over the last quarter

Top performing companies YTD

Sector Analysis

Fiona Owen
Partner and Head of South Asia Group Capital Markets
For Grant Thornton UK LLP

*Data sourced from Thomson Reuters.
**UK Trade and Investment
*** The India Watch index consists of 30 Indian companies listed on AIM or the Main Market (excluding GDRs). We only consider companies to be Indian if they are domiciled in India and/or foreign companies holding Indian assets or Investment companies with Indian promoters. The index has been created via Datastream, a Thomson Reuters product and is weighted by Market Value.