'Corona crash' wipes over ₹2 lakh crore from TCS share value in just 3 months
- TCS share price dipped to ₹1506.05 when markets opened today morning.
- The overall market crash was so massive that it triggered the circuit breaker limit halting trade for 45 minutes.
- This is the first time in seven years that TCS stock has dipped below ₹1600. The last time was in July 2013.
- Over the last three months, TCS' value has dipped by ₹2 lakh crore ($27 billion).
The stock of Tata Consultancy Services (TCS) hit a seven-year low as markets opened to a massive crash today morning. The company's share price dipped to ₹1506 as a massive global selloff affected Indian stock markets too.
TCS' value has gone down from ₹8.3 lakh crore in December to ₹6.3 lakh crore in the last three months — a dip of 24.3% resulting in market cap loss of ₹2 lakh crore ($27 billion).
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The last time the company's share price went below ₹1600 was in July 2013. IT stocks in India were already bearish amid a global economic slowdown. Things took a turn for the worse as India locked down borders and suspended most active visas.
TCS wasn't the only stock to crash in earning trading hours. In what is being called the Coronacrash, Asian markets — including Indonesia, South Korea, Thailand and the Philippines — halted trading as stocks plummeted the minute markets opened.
In India, the
circuit breaker limit was used for the first time in 12 years. It was triggered after Nifty50 crashed 10%. Trading was suspended for 45 minutes before markets reopened. However, TCS continues to be volatile.
Amidst this melee, TCS temporarily recouped its position as India's most valued company back from
Reliance Industries which faced the double whammy of coronavirus and crude oil price crash yesterday. However, it was back to being in second place after markets closed yesterday, March 13.
Even ₹4,500 crore couldn't fight the effects of the coronavirus
The massive dip in TCS value comes after the company met on March 11 and declared an interim dividend of ₹12 per share — a total payout of ₹4,503 crore. In fact, the announcement of dividends did nothing to slow the stock's downward trajectory this week.
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It's not just stocks in India but markets all over the world that continue to remain volatile amid the coronavirus outbreak. The New York Stock Exchange (
NYSE) may close its trading floor in the coming week to keep the Covid-19 virus from spreading.
The chaos in overseas markets has an undeniable effect on IT stocks. Any further upheaval in US markets, like closing down the trading floor, could have a negative impact on IT stocks like TCS in India.
The prolonged pandemic will have an effect on new client acquisitions and Kotak Securities corrected the revenue of IT companies by 2-4%.
“In addition to and partly as a consequence of Covid-19, client health has started deteriorating across many verticals. Specifically, sharp rate cuts impact the banking vertical. We expected moderate improvement in spends among US banking clients at the beginning of the year. However, subsequent turn of events has all but eliminated this possibility,” the report said.
TCS is only one of 783 stocks on the National Stock Exchange (NSE) to have hit its 52-week low this week. Yesterday, NSE and BSE saw the largest single-day fall of over 2,919 points since the 2008 financial crisis.
See also:
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