Core sector ADRs, GDRs lose sheen

Investors willing to pay premium for only software, banking stocks.

Around 60 per cent of India Inc's overseas shares, including mid-caps stocks from the cement, steel and infrastructure sectors, are trading at a discount to local shares.

Blue-chip companies, however, have been trading at a premium over their underlying shares.

According to data sourced from Bloomberg, international investors are ready to pay premium only for software and bank stocks. Companies trading at hefty discounts are those with weak fundamentals.

Cement giant ACC, surprisingly, was being traded at a huge 20.32 per cent discount on the London exchange at Rs 835.75 (parity price) on December 22.

The local share closed at Rs 1,048.90 on Friday. Ruchi Soya (8.89 per cent), Sterling Biotech (7.31 per cent), Gateway Distriparks (7.19 per cent) and MTNL (6.40 per cent) were also being traded at a discount.

State Bank of India, listed on the London bourse and the OTC in the US, is the most sought after stock, commanding a premium of over 30 per cent.

The SBI, which is trading at a premium of 15 per cent in inter-foreign institutional investors (FIIs) deals, was traded at a 32.65 per cent premium at Rs 1,604.65 (parity price converted into Indian currency) on the OTC, and a premium of 30.33 per cent at Rs 1,582.36 on the London Exchange. The stock closed at Rs 1,214.05 on the Bombay Stock Exchange last Friday.

Lyka Labs, which is planning a big global push, was trading at a premium of 30.39 per cent on the Luxembourg bourse at Rs 60.63, compared with its local price of Rs 46.50. JK Paper was traded at a premium of 30.35 per cent at Rs 55.92 on the Luxembourg bourse.

Among software stocks, Wipro was trading at a premium of 19.79 per cent,and Infosys Technologies, Satyam Computer and Patni Computer at premiums of around 9 per cent each.

There are 106 actively traded stocks on overseas exchanges, including trading of five companies on two exchanges, with Luxembourg topping the list with 81 companies.

The London bourse is home to 13 Indian companies, New York eight, OTC two, Nasdaq and Frankfurt one each.