The non-stop rally seen in shares of India's Public Sector Enterprises has taken their share in the country;s overall market capitalisation to the highest since August 2019. Data from Bloomberg indicates that India's state-run companies now have a 13.3 percent share in the equity market capitalisation at Rs 42 lakh crore.
Over the last four years, the combined market capitalisation of PSUs has increased by Rs 23 lakh crore to Rs 42 lakh crore. Four companies - SBI, LIC, NTPC and Hindustan Aeronautics have contributed to a third of these absolute gains. During the same period, the aggregated market capitalisation of all BSE-listed companies more than doubled to Rs 317 lakh crore.
State Bank of India commands the highest market capitalisation among the PSUs with LIC coming a close second at Rs 4.2 lakh crore. These two, along with ONGC and NTPC form a third of the overall PSU market capitalisation
Apart from the increase in stock prices, the overall market capitalisation of BSE-listed firms also received a boost as more companies went public. Among the PSUs, companies like LIC, SBI Cards, which are two of India's three biggest IPOs, along with IRCTC, IRFC, Mazagon Dock, Railtel and others went public during this period.
These companies together have a market capitalisation of over Rs 7 lakh crore, which is 16.5 percent of the overall PSU market capitalisation.
PSUs have been huge underperformers for several years now and are witnessing renewed buying interest. BHEL is a case in point. Having surged to levels last seen in 2015, the stock is still trading substantially lower than its peak of Rs 390, seen back in 2007. Same is the case with stocks like Coal India, which continue to hover around their IPO price, even a decade after their listing.
However, ICICI Securities believes that the recent surge in some PSU stocks is resulting in a breakout in some of them. “PSU theme is outperforming since beginning of CY23 and many companies that have underperformed for several years have started coming out of large consolidation patterns with large runaways ahead,” said ICICI Securities in a recent note.
(Edited by : Hormaz Fatakia)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
10% discount on fare on Mumbai Metro lines 2 and 7A on May 20
May 3, 2024 2:40 PM
'Rahul Gandhi deserted Amethi due to fear of Smriti Irani': How BJP plans to puncture Congress' UP plan
May 3, 2024 1:12 PM