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whats happening in markets?

Another day and another volatile fluctuations.
Whats happening with the market?

The stock market crash is defying all conventional wisdom of valuations. Many bigwigs are trading below their market capitalisation. This essentially means that, hypothetically , if you buy the complete equity of these stocks and sell the assets in the market, the realisation would be significantly higher than the price paid to buy the shares.

If we exclude companies with marketcap of more than Rs 1,000 crore, which have slightly better pricebook value ratio, combined market-cap falls further to just 54% of their total net worth. So if you have cash worth Rs 110,000 crore, you can acquire companies with total book value of Rs 205,000 crore.

Well, i know it is a conjectural scenario, as such buy-outs would have to follow the norms of a takeover which requires an open offer based on recent historical prices. Further, only a part of the shares are actually traded and it is not possible to buy the complete holding from the market.

Among the sectors, construction and textiles are the worst hit. Out of 100 companies with more than Rs 20 crore market-cap in the construction sector, 54 are trading below their book value. Similarly, for textiles, 75 out of 96 companies are trading below their book value. Besides construction and textiles, metals had 94 such companies whereas non financial services sector account for about 150 companies trading below their book value.

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