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Economy Aug 23, 2013

Rupee punch: Mukesh Ambani loses Rs 33,000 cr in just 4 months

By Firstbiz Staff

Even though the Reserve Bank of India has left no stone unturned to control the falling rupee, the Indian currency is hitting new lows every day and even breached the 65-mark on Thursday.

The depreciating rupee has raised spectre of an inflation spiral as imports of goods, including oil, become costlier. A higher inflation also means the higher borrowing costs. For the common man, the falling rupee is throwing his daily budget out of the window. From essentials such as food and education to foreign vacation and the swanky gadget you plan to buy, the falling rupee will hurt you in more ways than one.

The weak rupee is also playing havoc with corporates which have taken huge forex debt.

RIL Chairman Mukesh Ambani. AFP

RIL Chairman Mukesh Ambani. AFP

Three such companies are Bharti Airtel, Idea Cellular and Reliance Communications, which had resorted to overseas borrowing to meet their capital expenditure needs. The net worth of these telecom majors has witnessed significant erosion as the declining rupee has increased their dollar-denominated debt, the cost of servicing this debt and also charges paid to overseas vendors for services.

Mukesh Ambani, it seems, is the biggest loser among the country's billionaires.

According to the Bloomberg Billionaires Index, Ambani has lost 24 percent or $5.6 billion of his wealth since 1 May. Translated into Indian rupees, Ambani has lost Rs 33,600 crore of his fortune in nearly four months (at a median estimate of 60 rupees per dollar).

Ambani is left with a net worth of $17.5 billion or Rs 1 lakh crore.

His younger brother, Anil Ambani has also suffered heavy losses. Anil, the country's eighth richest manhas lost 17 percent, or $1.3 billion, of his net worth since May, notes the Bloomberg report.

According to the index,Dilip Sanghvi, the founder of Sun Pharmaceutical is reportedly the second biggest loser among the the Indian billionaires. Sanghvi has lost $2 billion in net worth since May. Kumar Mangalam Birla, the 46-year-old chairman ofAditya Birla Group, has lost about $950 million, or 11 percent, of his net worth since May.

Read the Bloomberg report here.

Disclosure: The Reliance Group has funded the promoter of Network18, which publishes Firstpost

by Firstbiz Staff

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