PSU stocks zoom on govt's plan for stake divestment

Sat, Nov 7 06:47 AM

Stocks of public sector companies shot up by up to 20 per cent on the bourses on Friday after the government announced its stake sale plan in public sector units (PSUs). The rise was more pronounced in listed PSUs where the government holds over 90 per cent holding. The BSE PSU index rose 3.91 per cent even as the BSE Sensex closed up 0.6 per cent (94 points) at 16,158.28.

State-run NMDC hit its upper limit of 10 per cent at Rs 338.40 while MMTC shot up by 20 per cent to Rs 36,146.85 and Hindustan Copper by 10 per cent to Rs 256.35. National Fertiliser gained 9.43 per cent at Rs 60.35. STC soared by 14.84 per cent to Rs 354. The government holds over 90 per cent in all these companies.

NMDC's market cap rose by over Rs 12,000 crore to Rs 134,165 crore on Friday. MMTC's market cap jumped a whopping Rs 30,000 crore to Rs 180,734 crore in a day.

"The PSU stocks were in the limelight today in view of the announcement regarding PSU disinvestment," said Bonanza Portfolio assistant vice-president (research equity) Avinash Gupta. Among other PSUs, Steel Authority of India and Shipping Corp of India rose 1.3 per cent and 2.5 per cent respectively.

The government said all profitable, listed state-run firms must have at least 10 per cent of their shares in public hands, and unlisted firms that had a positive net worth, no accumulated losses and a net profit over the past three years should list.

It said the funds from the listings would be spent on social schemes for three years. Currently, proceeds are put in a National Investment Fund and only its dividends are used for funding social security schemes.

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