India's richest man loses $5.6bn as the rupee dives
Loss of foreign investment and rupee’s falling value have wiped out 24 per cent of Mukesh Ambani’s fortune
INDIA’S richest man has lost $5.6bn (£3.6bn) in the last few months as the rupee's record slump erased 24 per cent of his fortune. Mukesh Ambani, chairman of Reliance Industries Ltd, the operator of the world’s biggest oil refinery complex, is now left with a net worth of $17.5bn (£11.23bn), according to the Bloomberg Billionaires Index.
Although India was once seen as a rising economic power similar to China, the Indian rupee is now the worst-performing major currency in the world. The currency has been in a continuous downslide in recent weeks and yesterday fell to a record low of 64.55 per dollar.
Ambani's younger brother, Anil Ambani, has also suffered heavy losses. Anil, the country's eighth richest man, lost 17 percent of his net worth, or $1.3bn (£834m), leaving him with $6.3bn (£4bn), Bloomberg reports.
Since the announcement in May that the Federal Reserve was slowing down and would eventually end its quantitative easing scheme, there has been a rush from US investors to sell their emerging market holdings.
Munesh Khanna, a senior partner at Grant Thornton LLP in Mumbai, said that as foreign investors sell shares in India’s large-cap companies and the rupee declines, the value of holdings by India’s billionaires has become worth significantly less in dollars.
“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.”
According to the nation's Securities & Exchange Board, international investors have sold a net $3 billion (£1.9bn) of Indian stocks since June 3. Yesterday, the Sensex stock index fell nearly 2 per cent to close at 17,905.91, the lowest since July 2009. ·