18 public sector units expected to line up IPOs soon
20 May 2009
About 18 public sector undertakings (PSUs) are expected to hit the market this year once the Congress-led United Progressive Alliance (UPA), which is set to form the government at the centre for a second time in a row, revives the divestment programme.
The new government is expected to pursue the divestment programme with renewed vigour after the decisive win of the Congress-led UPA in the 15th Lok Sabha elections, experts feel.
According to the data compiled by SMC Capitals, 18 PSUs, with a total issue size of Rs7,405 crore, are planning to hit the capital market thif fiscal. This includes big ticket IPOs of Oil India (Rs1,400 crore) and NHPC (Rs2,060 crore), which are expected to tap the market by September.
With the stock market already showing signs of recovery, the IPOs of the public sector units are expected to give a big boost to the capital markets.
With the burden of fiscal deficit looming and the deficit set to widen further, the government would concentrate on divesting its stake in these companies, experts feel.
PSU stocks rallied on Monday, contributing nearly half of the total gain in investor wealth of Rs360,000 crore - its second biggest single-day gain ever.
About 46 PSUs reported strong gains (around 10 per cent), adding Rs180,000 crore to investor wealth. Market players are now looking to make gains from divestments and changes in capital structure of banks and insurance companies.
The top five PSUs - ONGC, NTPC, NMDC, BHEL and MMTC - together have made the government richer by nearly Rs100,000 crore.
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