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Richest Indian becomes poorer
Recent drop in the stocks of Mittal Steel may portend the end of LN Mittal's supremacy in the global rich list.
Steel king and one of the richest persons in the world, LN Mittal, may be poorer by over Rs 40,000 crore, due to a sharp fall in prices of his flagship company Mittal Steel, since March this year.
Listed as the richest Indian and third richest person in the world by international magazines in their recent rankings, his company may be worth about 15 billion dollars or over Rs 65,000 crore going by the price of 24 dollar a share, and where he and his family have 88 per cent holding.
Prices of his company have fallen from $42.36 a share at the New York Stock Exchange on March 4, 2005 to $24 a share on April 28, 2005, according to information available from the market.
Going by the March 4 price of shares, Mittal Steel was valued at about $28 billion and Lakshmi Mittal's holding could be estimated at about Rs 115,000 crore.
Mittal, ranked third on the Forbes list of richest men in the world in their March 2005 rankings, could suffer in terms of his position among the wealthiest men in the world.
Now Mittal's networth has slipped from 25 billion dollars in March to about 15 billion dollars by April end.
Part of the fall in the stock prices of Mittal Steel can be explained by the fact that stock markets in the US have generally been declining.
The Dow Jones Industrial Average has declined nearly 8 per cent, since March 4 from 10,940.55 to 10,070.37 on April 28. There have been a host of factors responsible for this fall like rising interest rates in the US, tightening liquidity, concerns over a slowdown in the US economy and earnings misses by majors like IBM and Samsung.
However, this still does not explain the nearly 44 per cent drop in the share price of Mittal Steel.
Analysts point out that the global commodities cycle may be about to peak and there could be a slowdown in world demand for steel, particularly if the Chinese economy starts 'hard landing' and US economic growth becomes sluggish.
Interestingly, even if Mittal is out of the global rich top ten, he would still retain the tag of the richest Indian.
His networth of 15 billion dollars would still place him ahead of Wipro's Azim Premji who, with a networth of about seven billion dollars, would come a distant second.
Still, Mittal's current position is a far cry from him being touted as the Andrew Carnegie for the 21st century just last year. Going strong amidst a clutch of acquisitions such as that of Polish steel maker Polskie Huty Stali, there seemed to be no stopping to this man of steel.
But the recent drop in the stock of Mittal Steel may portend the end of his supremacy in the global rich list.
