Demonetization and its Impact on Share Price of Select Companies In India Listed with BSE

Demonetization is the process by which a series of currency will not be legal tender. This is usually done when there is a change of national currency, replacing the old notes with new one. The demonetization was done in an effort to stop the counterfeiting of the current banknotes alleged to be used for funding terrorism and for checking down on black money in the country. Such a step taken by Indian government is like a master stroke for the Indian Economy and it had affected various sectors like Agriculture, Automobiles, Banking, Telecom, Real-estate, Cement, Pharmaceutical etc., This sudden announcement and President Election in US affected the stock market, where market indices dropped to six months low in the week following the announcement of demonetization. BSE crashed around 1689 points and NIFTY over 541 points. The main aim of this study is to analyze the impact of demonetization on the share price of select sectoral companies and to predict the share price behavior in future. The study concluded that there is increase in share price of majority of the companies namely, Maruti Suzuki, Tata Motors, ACC, BhartiAirtel, Idea Cellular, MTNL, HDFC Bank, SBI, Kotak, Oberoi Realty, Prestige Estate and India Bull and all other companies share price were shown low. However there is no big difference, it is just a slight decrease. Though some sector companies recovered from the short term fall, in other hand some companies are suffer due to this initiative and it will result in subsequent quarter, it can recover from this short term affect in an upcoming period.