Indian company share prices struggle in H2 2018

Anuj Chande Anuj Chande

The Grant Thornton India Watch share price index continued to fall during 2018, down 12.5% in H2.

The 12.5% decline in the India Watch Index during the second half of 2018 was largely due to a drop in stock values for a number of its largest companies, including Indus Gas Ltd and Symphony Holdings International Ltd. The FTSE AIM 100 fell by 22.8% for the same period, while the FTSE 100 fell by 11.9%.

Despite this, the outlook for the Indian economy is still positive. India continues to be the fastest growing G20 economy, and is expected to maintain this position in 2019, with growth forecast at 7.3% compared to 6.4% for China1. This forecast assumes a continued increase in business investment and exports, which has been driven by ongoing structural reform, such as the new Insolvency and Bankruptcy Code, and smoother implementation of the Goods and Services Tax (GST)2

However, certain matters still need to be addressed for the economy to continue to progress. India’s current account deficit continues to widen, increasing to 2.9% of GDP in the second half of the year, compared to 1.1% of GDP in December 20173. This is largely a result of a widening trade deficit. A stronger focus on improving India’s export growth through the diversification of product offerings would help curb this trend4. In addition, monetary policy needs to be tightened in order to manage increased inflationary expectations in the market2.

Winners and losers in H2 2018

Oilex Ltd was H2’s biggest winner in share price terms, boasting an impressive 89% gain. The company explores, appraises and develops oil and gas resources for production and sale. Oilex operates across India, Australia, Indonesia and the Joint Petroleum Development Area (JPDA) in the Timor Sea. Its share price performance was driven by continued strong organic growth, coupled with the successful resolution of a long-running legal case.

iEnergizer was the second strongest performer for the period, experiencing share price growth of 69%. The company and its subsidiaries provide business process outsourcing, content delivery and back office services, including in the UK, India and US. The company reported strong interim results in November 2018, with half-year revenues and profits up on the prior year. This continues a strong growth trend for the company, following a 43% share price increase in H1.

The third largest winner of H2 was OPG Power Ventures PLC, whose share price grew by 28% over the six months. The company develops, owns, operates and maintains private sector power projects in India. The company reported strong interim results in November 2018, with production levels, revenue and profits all rising significantly relative to the prior year.

On a more negative note, Hardy Oil and Gas PLC, an upstream oil and gas company with business units in India and the UK, was H2’s biggest loser, with a fall in share price of 76%. This decline was partly attributable to a ruling by the Supreme Court of India in September 2018, which enabled the Indian government to appeal an exploration license arbitration award that had originally been ruled in the company’s favour.

Koovs PLC, the online fashion retailer often described as the ‘ASOS of India’, was the second biggest loser of H2, suffering a 60% drop in share price. This decline reflects a number of significant share issues undertaken in the second half of the year. Koovs issued 57.9 million shares to Future Lifestyle Fashions Ltd, a nationwide bricks-and-mortar fashion retailer, at 10p per share, and a further 80 million shares to existing shareholders in July 2018, at 15p per share.

In September 2018 Future Lifestyle Fashions Ltd further expanded its interest in the company, by agreeing to buy between 63.3 million and 69.9 million new shares at 15p per share. While reducing the share price, these funds will provide a strong platform from which Koovs aims to become India’s leading fashion etailer.

With a drop in share price of 57%, KSK Power Ventur PLC, which develops private power projects and builds and operates power stations throughout India, was H2’s third largest loser. This concludes a difficult year for the company, with its share price declining significantly after India’s Reserve Bank introduced the Resolution Framework in February 2018.

This framework severely impacted the industry’s banking environment, resulting in KSK Power Ventur disposing of a number of its subsidiaries. In July 2018, shares in the company were temporarily suspended from trading, following an announcement of anticipated delays in finalising its audited financial statements for the year ended 31 March 2018.

For more information please contact Anuj Chande.


  1. IMF lowers India's growth projection, but it still retains world's top spot, The Economic Times, July 2018
  2. India economic forecast summary, OECD, November 2018 
  3. India remains fastest growing economy ahead of China despite up/downs, The Economic Times, January 2019
  4. Reining in Current Account Deficit: Options for India, Forbes India, October 2018
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