Lehman Brothers Bankrupcy - the Indian impact
Wednesday, September 17, 2008
Lehman Brothers, the world’s fourth-largest investment bank was a leading global
financial-services firm until this September 2008. On September 14th 2008 Lehman announced it would file for Chapter 11 bankruptcy protection.
On September 10, 2008, Lehman announced a loss of $3.9 billion and their intent to sell off a majority stake in their investment-management business and its stock price dropped another 40 percent on September 11, 2008. This happen to be a big blow
to the US markets, the Dow Jones closed down 500 points on September 15, the largest drop since the days following the attacks on September 11, 2001.In India the impact was multifold, on its own employees, on various projects which Lehman has been investing and the centiments of the markets.
Lehman currently employs about 2,500 people in India. The mood in their office at Ceejay House and back office at Hiranandani Gardens in Powai is very grim. employees have been asked to wait for 72 hours before a decision from the headquarters is communicated. But most have already made up their minds. Most of them qualify for firms such as PricewaterhouseCoopers, JP Morgan and Deloitte
The development has already lead to a loss of nearly Rs 2,000 crore for Indian companies in which Lehman had made equity investments. Even some reality developers feels the heat. ICICI Bank will lose around Rs.375 Crore as ICICI Bank UK Plc holds 57 million euro of senior bonds of Lehman Brothers Inc
The Indian markets experienced the ripple effects of the Lehman collapse, the mood is so bad that there are simply no genuine buyers in the markets. On 15th Sept The Bombay Stock Exchange (BSE) benchmark Sensex fell by 772.62 points and the Nifty of the National Stock Exchange also dipped below 4,000-mark by falling 242.40 points.
The ray of hope:As of 18th September 2008 there is news that Barclays has agreed to acquire Lehman Brothers' North American investment banking, and fixed income and equities sales, trading and research operations, including approximately 10,000 employees.
posted by Rishil Babu @ 7:47 PM,
