Mumbai: Shares of public sector units (PSUs) with more than 90 percent
government stake gained between 10 and 20 percent last week, after the
cabinet decided to raise public shareholdings in the companies to at
least 10 percent.
Last week, the Cabinet Committee on Economic Affairs approved a
mandatory minimum 10 percent public ownership in all listed and profit
making PSUs. The Committee also approved listing of all the unlisted
but profitable PSUs. "This is a very positive move as it will bring
more accountability and more transparency to the government
enterprises," said Gopal Agrawal, Head of Equity at Mirae Asset
Management Company.
All the PSU stocks registered gains after the stock market opened on
Friday, but the gains were the most in those listed PSU with less than
10 percent public shareholding, reports Business Line. The stock of
public sector international trading company MMTC gained 20 percent to
close at Rs. 36,146.85 on the Bombay Stock Exchange (BSE). Public
holding in MMTC is less than one percent, with the government holding a
99.33 percent stake in the company.
PSUs with more than 90 percent government holding gained heavily last
week. Some of them were HMT, Hindustan Copper, NMDC, State Trading
Corporation of India, Rashtriya Chemicals and Fertilizers and Engineers
India. The BSE PSU index closed with a gain of 3.91 percent on Friday,
while the Sensex rose only 0.59 percent.
Timing of the issues by the public sector companies would be vital to
their success, said market experts. National Hydroelectric Power
Corporation's Rs. 6,000 crore Initial Public Offering (IPO) had a
subdued listing and its shares are trading below the issue price of Rs.
36. However the stock bounced back on Friday and closed with a gain of
six percent on the BSE at Rs. 32.65.
According to market watchers, the unlisted and profit-making PSUs that
are strong candidates for listing include Nuclear Power Corporation,
Coal India, Bharat Sanchar Nigam (BSNL), Rashtriya Ispat Nigam, North
Eastern Electric Corporation and Satluj Jal Vidyut Nigam.
