Plans for disinvestment of public sector enterprises to hit market share

Mumbai, Ta. 23 August 2019, Friday

While the share prices of several public sector enterprises are currently falling at an all-time low, the government's disinvestment plan of Rs 1.8 trillion may be hit by the current fiscal year. The share prices of some public sector enterprises have been at a low level for decades. The BSE PSU Index has declined by 5% in the last one year, which has declined by 5% so far.

Compared to this, the Sensex has shrunk by 8.2% in the last one year while in terms of 1, it is still 8.2% higher. The target of disinvestment has been increased to Rs.

The Government intends to consolidate such initiatives through strategic sales in public sector non-financial sectors. Oil India, GIC of India, Coal India and MTNL share prices fell to new lows. In addition, Sail, Shipping Corporation of India and ONGC have been speaking at a low level for several decades.

The market will continue to be under pressure when the economy is slumping and corporate earnings are projected to remain low, said one analyst. The highest decline has been seen in the stocks of public sector undertakings. A recent report from Nomura lowered the Nifty target from 1 to 5 at the end of March.

Public sector enterprises in the country are more concentrated in capital goods, electricity, metal and mining.

The revenue growth of government-owned enterprises, which are slowing down investment by the private sector, has been slow.

Despite poor profitability, some public sector enterprises have lost their balance sheets over the past few years, paying huge dividends. The combined borings of the three central public sector enterprises in FY13 increased by 5 percent annually while their operating profit increased by 8 percent.