PSU stock valuation up Rs 161,400 cr in November

The government’s disinvestment plan has given a new vigour to the stocks of public sector units (PSUs) listed on the stock exchanges. Market capitalisation of over 30 PSUs has gone up by Rs 161,400 crore to Rs 12,97,500 crore in the last nine trading sessions after the government announced its plans to dilute the floating stocks in listed PSUs by a minimum 10 per cent,leading to a fall in government holding to around or below 90 per cent level.

Of this,as much as Rs 92,500 crore market value was contributed by just two stocks — MMTC and NMDC. The government holds over 98 per cent in both the companies. NMDC’s market cap soared by Rs 59,331 crore to Rs 172,801 crore since November 3. Both the stocks are illiquid with low floating stocks. MMTC,in which the government holds 99.33 per cent stake has only 4,676 shareholders. The BSE PSU Index has soared by 12.66 per cent in Novemnber. The Sensex has gone up 9.3 per cent in the same period.

“The government is the biggest beneficiary in the rise in market valuation of listed PSUs as it holds majority stake. NMDC shares which rose by 43 per cent to Rs 434 in the last nine trading sessions have undergone a re-rating in the last a few days. If and when the government announces concrete plans on the divestment front,PSU stocks will undergo further re-rating,” said BSE dealer Pawan Dharnidharka.